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Thursday, February 07, 2008

Interest Rates

The Bank of England's Monetary Policy Committee (MPC) sits down today, and decides as to what they will do with interest rates.

The Fed has led the way by slashing rates in the USA. However, we can be assured that the MPC will not follow suit with such an assertive cut.

At best we can hope for a 0.5% reduction, realistically the cut will most likely be 0.25%.

This of course will have little beneficial effect on the economy; as the rate cuts are rarely passed on in full to borrowers, but always passed on in full to savers.

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