Thursday, 6 November 2008
Bank of England cuts interest rates by 1.5%
By: Murdoch MacDonald
THE Bank of England has cut its interest rate by 1.5% to 3%, the lowest since 1955, in order to stimulate the economy.
Scottish Cabinet Secretary for Finance and Sustainable Growth John Swinney welcomed the Bank of England’s decision to cut interest rates by 1.5 percentage points, and urged banks to pass on the benefits to their customers.
He said: “The Scottish Government has long been demanding a deep cut in interest rates, and this announcement is very welcome. It is a much needed move for home owners and businesses across Scotland.
“However, while a 1.5 per cent cut in interest rates is certainly not too little, it may be rather too late to avert recession, and does underline the depths of the UK’s economic problems.
“What is vital is that banks - which are benefiting from a substantial investment of public money - now pass on the benefits to their customers. By doing so they can help keep the Scottish economy moving.
“Like countries across the world, Scotland is feeling the effects of the global downturn. That impact is being felt in the home and on the high street alike.
“As a Government we are doing all we can to help - slashing business rates and providing the funding for a further freeze of the Council Tax.
“But, as we have made clear over recent weeks, we need others - not least the UK government - to do the same.
“There needs to be a general programme of economic reflation, including a reduction of tax on energy bills this winter. And in difficult times we need flexibility. That's why the Treasury needs to relax its inflexible accounting rules so that we can access our unused money in UK bank accounts - including the Fossil Fuel Levy and our own underspend - to invest in economic activity in Scotland now.”
Bank of England
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