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Thursday, December 04, 2008

Bank Cuts Rates

Banks across the world have made a series of co-ordinated interest rate cuts today (eg Sweden's Riksbank cut rates by 1.75% to 2%)in an attempt to ease the pain of the recession and to restart the engine of liquidity.

The Bank of England also cut rates by 1% to 2%, they are now at 1951 levels.

As already noted, we are heading towards zero rates.

The question is, will the banks willingly pass on these cuts and start lending again or are more drastic measures required?

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