Emergency Interest Rate Cut Announced (from All Major Central Banks)

[Harry North]

These unilateral rate cuts are expected - don't get carried away

[Gone baby gone]

wow the DOW will recover yesterdays losses...FTSE 100 in positive territory. Good decsion for the wider economy/business in general if the cuts are passed on.

Since the government now own a portion of most major banks, I think they will be applying quite a bit of pressure to ensure some, if not all, of the cut is passed on.

[interestrateripoff]

"In the light of that outlook, the Committee judged at its October meeting that an immediate reduction in Bank Rate of 0.5 percentage points to 4.5% was necessary to meet the 2% target for CPI inflation in the medium term."

Ha ha. I've never heard such a crock of cr*p in my life.

So CPI is above target but they must cut by 0.5% to meet the 2% target in the medium term. Brilliant.

This is to try and avert inflation in negative territory. So in a sense the statement makes sense.

[Bingley Bloke]

Right, so people will get lower loan repayments but have to fork out loads more for food, energy, etc. and anyone who has savings might as well withdraw them and burn them.

[jimi]

So can the Halifax now just get on with it and publish their September HPI report, since they won't influence tomorrows meeting!

[Austin Allegro]

Could anyone explain in layman's terms what this will mean for the economy, as opposed to, say, a hold or increase?

[workingnomad]

Does this means house prices will start creeping up again?

[Normal]

Not worth keeping my savings in a bank any more. Bank run anyone?

[W12]

At the risk of going against the prevailing "bring on the apocalypse" mood of HPC, this rate cut is probably a good move. Remember, six months or so ago, the annual rate of house price inflation was positive, whilst the reality was anything but.

[ExeC]

Price of the shiny yellow stuff just shot up.

I must be looking at the wrong graph as it shot down on mine.

[Leonard Hatred]

Does this means house prices will start creeping up again?

We will not avoid recession, so no.

[Mr Prudence]

Could anyone explain in layman's terms what this will mean for the economy, as opposed to, say, a hold or increase?

It allows banks to rebuild balance sheets, expect immediate cuts in savings rates followed by miserly cuts in mortgage rate effective Jan 01.

[munimula]

The builders are liking that.

Taylor Wimpey +28%

Barratts +10%

Persimmon +13%

[interestrateripoff]

At the risk of going against the prevailing "bring on the apocalypse" mood of HPC, this rate cut is probably a good move. Remember, six months or so ago, the annual rate of house price inflation was positive, whilst the reality was anything but.

It's only good news if repayment of debt increases.

If this doesn't happen it solves nothing.

Panic across the central bankers.

[Barb E Dahl]

Not worth keeping my savings in a bank any more. Bank run anyone?

I think bricks and mortar would be a better investment.

[StainlessSteelCat]

Damnit, I should have bought an expensive house and let inflation eat the debt away

My plans foiled by the establishment, again! f***ers!

Not necessarily. It's wage inflation that counts where debt is concerned - not inflation in general. Hands up anyone who thinks their salary is going to increase massively over the next few years.

....Anyone?

[squire]

Likely to cause more upward pressure on wages I'd imagine. More chance of strikes and all that merry-go-round stuff.

[Selling up]

I must be looking at the wrong graph as it shot down on mine.

Oh yeah. It was me looking at the wrong graph.

Remind me never to comment on short term price movements anyway - I keep telling other people off for doing it, be it on gold or shares.

Long term trend is what matters.

[ʎqɐqɹǝʞɐɥs]

So can the Halifax now just get on with it and publish their September HPI report, since they won't influence tomorrows meeting!

Maybe there will be another cut tomorrow.

[ExeC]

Oh yeah. It was me looking at the wrong graph.

Remind me never to comment on short term price movements anyway - I keep telling other people off for doing it, be it on gold or shares.

Long term trend is what matters.

Hehe.

Seems like the FTSE shot up along with DOW and its now on its way back DOOOOOOOOOOOOOWNNN...

Who was that guy who tried to stop the tide coming in ?

[ʎqɐqɹǝʞɐɥs]

I must be looking at the wrong graph as it shot down on mine.

Is your screen the right way up?

[rickybruce]

Obvious attempt to create a swirl of 'positive' news along with the bail out to sway sentiment and get everyone back on the debt train. They haven't realised its near the end of the line though.

[frozen_out]

This is to try and avert inflation in negative territory. So in a sense the statement makes sense.

Exactly. This will not result in hyperinflation, we are not going to get hyperinflation. It's simply an attempt to avert massive, short term deflation.

[gruffydd]

FTSE's just started nosediving? Back in -ve territory. Jasus, the way this was done is more likely to induce panic than confidence.

Edited October 8, 2008 by gruffydd

[Gel]

This still doesn't make banks trust each other

Just makes it worse.

Why today when they could of cut tomorrow.

Something really bad is coming.