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20 Sept 07 - Lower Bank Rate Hope After US Cut
The US Federal Reserve's move to cut interest rates by 0.5%
to 4.75% sparked a wider stock market recovery amid anticipation
that the global credit crunch may be easing.
Northern Rock has been particularly badly hit by the squeeze
after it encountered liquidity problems on the money markets
following the collapse in US sub-prime mortgages, forcing
it to go to the Bank of England to secure emergency funding.
Some economists are also now predicting a cut in UK interest
rates after minutes of the Bank's Monetary Policy Committee
showed members voted unanimously to hold rates at 5.75%
this month.
With inflation running at 1.8% in August - below the Bank's
2% target - there are renewed hopes that borrowing costs
may have finally reached their peak. Bank Of England
News items supplied by SelectNews, produced by PA Business,
part of the group that owns The Press Association, the UK's
national news agency. Copyright (c) PA Business 2007.
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