Interest rate drop Article Published: 23:21 12/11/2008 Article Classification: Kalamon Fund
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The Bank of England have announced an interest rate reduction of 1.5%, taking almost everyone by suprise. This is targetted to try to help kick start the economy and slow down the decline in growth.

If the high street banks pass this cut on to lenders through loans and mortgages, then there should be a significant increase in numbers of UK property sales over the coming months, retail spending should increase and unemployment slow down.

But with confidence at a virtually unprecedented low, the jury is out as to how this will be viewed, certainly the early signs from the FTSE are not that positive. In these troublesome times, it is easy to see how emotion rather than the fundamentals are largely to blame for boom or bust economies and the constant negative comments in the media have had a self fulfilling effect.