No Change to Interest Rates

Yesterday the ECB disappointed those who had been hoping for an interest rate cut . Having already  raised  interest rates from 1% to 1.5% this year  – the caution of the ECB was predictable.
If the ECB  had lowered rates so soon after they had been raised it could have been  humiliating. Also – as  this was the last meeting with Jean-Claude Trichet as president – he probably thought  that if  there is to be a change in policy –  it should  be the new president who will make it.

In the UK – the base rate remains at an all time low of 0.5%.  Earlier this year it seemed that the Bank of England’s next move might be a rise in interest rates as inflation was taking off again.
But  nine months of a stalled economy  and worries about knock on effects of the Eurozone problems have put any ideas of UK interest rate rises on the back burner for now.

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