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Bank of England to slash key rates again

04 March 2009 09:02 (UTC +04:00)

Bakuâ€“ APA-Economics. The Bank of England is expected to slash its key interest rate on Thursday by half a percentage point to just 0.5 percent -- the lowest level in the bank’s 315-year history, analysts said, AFP reported.
Faced with Britain’s first recession in 18 years and falling inflation, the central bank is set to extend a series of sharp cuts since October, when interest rates stood at 5.0 percent.
The BoE’s nine-member monetary policy committee (MPC) may also on Thursday announce plans for quantitative easing -- a last-ditch effort to increase money supply -- as it becomes clear that lowering rates has failed to stimulate the economy sufficiently.
BoE Governor Mervyn King last month wrote to Britain’s finance minister, Chancellor of the Exchequer Alistair Darling, seeking permission for quantitative easing -- a measure also being considered by the US Federal Reserve among others to get the economy back on track.
On Thursday, the European Central Bank is also set to cut its key lending rate by 50 basis points to a record low 1.5 percent after eurozone economic activity hit an all-time trough in February and the bloc shed a quarter of a million jobs.