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Pastimes : The Hot Button Questions:- Money, Banks, & the Economy -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (83)	10/16/2002 8:38:20 AM
From: maceng2	Read Replies (1) \| Respond to of 1417

Bank chief 'steering toward interest rate cut' ananova.com Bank of England Governor Sir Edward George is hinting that sharp falls in the stock market could lead to even lower interest rates. Pictured here in a buoyant mood as he takes the helm of a Mersey ferry, Sir Edward is in Liverpool to host a meeting of the Court of the Bank of England - part of a recently established programme of formal meetings outside London. The meetings follows a dinner in Manchester last night when Sir Edward said there had been a "nervous breakdown" in the international markets, due in part to fears of international terrorism, high profile corporate collapses in the US and concerns about the impact of a war on Iraq. As a result the Bank's Monetary Policy Committee would have to consider whether interest rates, already at a 38-year low, would need to be cut even further to inject fresh confidence into the markets. "Whatever the causes, the sharp further falls in equity prices have given rise to concerns about the strength of business and consumer confidence, and to doubts as to the sustainability of the global recovery," he said. "Internationally, and here in the UK, both in financial markets and within the MPC, the monetary policy debate has shifted back to the possible need for monetary stimulus." But he acknowledged that there was a "risk" in trying to keep the economy going by cutting rates to encourage consumers to borrow money to carry on spending, as it could lead to an "abrupt retrenchment" if households suddenly decided they needed to start paying off their debts.