Bank of England cuts RATES, ECB holds steady.
FRANKFURT (AP) — The European Central Bank halted its campaign of rate cuts on Thursday, leaving its benchmark refinancing rate at 2 percent, while the Bank of England cut by a half-point to a record low 1 percent as it combats a deepening recession brought on by the world financial crisis.
The decision by both banks was widely expected but marked decidedly different approaches to the global economic woes that have sent markets plunging and led to thousands of layoffs, reduced worker hours and factory shutdowns. Full Story.
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The 2009 economy and your wallet
The new president’s first job will be to repair a badly broken economy. Here’s how he’ll take on the four biggest challenges – and what that means for you.
By Janice Revell, Money Magazine senior writer
Last Updated: January 13, 2009: 8:52 AM ET
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The danger of keeping rates at zero
By Paul R. La Monica, CNNMoney.com editor at large
Last Updated: January 13, 2009: 1:28 PM ET
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But I’m starting to worry a bit that the Federal Reserve is willing to leave rates this low for too long and that this could spark inflation down the road.
In a speech in London Tuesday morning, Federal Reserve chairman Ben Bernanke defended the Fed’s series of rate cuts since September 2007, saying that inflation was no longer a major concern. The Fed usually raises interest rates when it is worried about inflation.