Bank of England Slashes Rate to 1%

by Trader Rich

Historic low beats previous BOE low
Last month, the Bank of England cut interest rates to the lowest in the more than 300 year history of the bank. This month, the BOE continued its rate cutting trend, bringing the rate to 1%. The euro zone interest rate has remained the same, at 2%.

This new interest rate came despite the fact that the Monetary Policy Committee feels that previous rate cuts have not had time to work on the economy. There is some speculation that the MPC may take a break from rate cuts next month in order to let them have time to provide some economic stimulus.

The decision to cut rates has actually worked in the sterling’s favor in currency trading. The U.K. pound is up against both the U.S. dollar and the euro in forex trading on the news — which brings hope that the British economy may soon start recovering.