ECB and BoE both cut rates
06-03-2009
The European Central Bank has cut interest rates by half-of-one percent to 1.5%. Earlier the British central bank, the Bank of England, cut its benchmark lending rate by half-of-one percent to 0.5 percent, an all-time low. At the same time time it said it would try to boost bank lending by increasing the amount of money in circulation by 75 billion pounds - a policy known as 'quantitive easing'. No new money will be printed but the central bank will purchase UK government and corporate bonds currently owned by banks so they have more money to lend. The Bank of England will not borrow to fund the purchases. Detractors say it will adversely affect savers.
