There’s been one news item this week that has overshadowed everything else that’s been on our tellys and in our papers. Okay, that’s not strictly true. Obama’s presidential victory was a huuuuge news story here and even the contents of his iPod have been deemed newsworthy this week. But in terms of homegrown news, you’d have to have been living under a very large rock to miss the cut in interest rates.
On the first Thursday of every month, the Bank of England’s Monetary Policy Committee meet to decide the base rate. This week, the MPC made the shock announcement that they were slashing the base rate from 4.5% to 3%.
To put that into perspective, the last time rates were this low Winston Churchill was Prime Minister and food rationing had just ended. Yep, they haven’t been this low since 1955.
Some pundits are predicting that we will soon have a historically low base rate, they have never been below 2% in this country but we may be seeing something along the lines of our American cousins’ 1% base rate by the middle of next year.
Perhaps the cut is working already, I spent this afternoon regretting the fact I was on Oxford Street (the shopping capital of the country)…the shops were heaving so it can’t all be doom and gloom.
Interestingly, traffic on Globrix saw a significant increase after the announcement of the base rate cut. Maybe it will give the housing market the boost in confidence it needs.