UK Rate Cut

The US has cut their interest rates yet again on Tuesday January 22. This has caused quite a bit of stir on the markets creating the shares of most stocks to lower. While there had been talk about more rate cuts it was still astonishing to find that the US Federal Reserve decided to cut the rates by three quarters. This set the point of Footsie at 161.9 points to close at 5740.1 yesterday, which was a 3 percent rise. You will also find that the day before, which was Monday there were several issues in the London Markets. Black Monday as it is known suffered one of the largest set backs on the market trading since 2001 and the nine eleven attacks.

Further issue could be seen with the US recession talk. It seems that the talk has created issues with Footsie by lowering it 323 points. This is a five percent decrease that occurred on Monday. The rate cuts have lowered the points even more with a 239.5 loss due to the rate cuts. The instability that has resulted because of the US rate cuts seems to have spread a point total of 425. This difference between the high and low is quite a jump.

The Dow Jones Average in the US has also seen a great deal of issues since Monday’s holiday. It seems that the Dow Jones has declined by more than 450 points, which has brought on a lot of fear regarding the rate cuts. It seems that the rate cut is the largest it has been in over twenty five years and it may not help the overall market. Since the fear of recession is very near in everyone’s minds in the US the rate cuts have been created to head off the actual possibility of such a thing happening. If the recession does take place the fear is that the fall will spread throughout the world in a global matter.

The Bank of England has now begun to focus on their problems and whether they will actually see some effect from the US emergency cut. In other words there is talk that the UK may have to follow suit in the next few weeks due to the US rate cuts. The Bank of England is trying to reassure everyone though. They are saying that there are no plans as of yet that there will be a rate cut. There is a meeting to be held on February sixth and seventh that will decide the fate of the UK rates. At the moment though the January rate meetings are only concerned with the UK monetary policy, and there are no talks of actual rate cuts being mentioned.

It should be further noted that the US has again reduced the interest rate by 3.5% in order to stop the losses in the economy and help keep the recession from becoming a full blown issue. The Federal Reserve has been trying to come up with a variety of aspects to stop the recession.

Back To January 2008 Financial News
Purchasing with Credit Cards
Traps with Credit Cards
Understanding Credit Scoring
What Is A Credit Reference Agency
Testing Your Debt
10 Ways To Save Money
Benefits of Savings
How To Save of Invest Your Money
Individual Savings Accounts
Sainsbury’s Bank Internet Savings Account
Product Types For Savings
Saving with Child Trust Funds
Savings and Investments Advice
Trouble Ahead with Free Banking
Warning: Savings Rate Change
What Makes Consistent Savings Account?
Credit Building Solutions
Britain Needs to Protect Itself
Free Banking or Unfair Bank Charges
Reintroducing Child Savings
How To Get The Most From Reward Credit Cards - Part 1
How To Get The Most From Reward Credit Cards - Part 2
UK Economy Growth
UK Rate Cut
US Recession and Britain