Interest Rates Slashed

Interest rates have been cut by 0.5%. Six central banks, including the Bank of England, have made the move in an effort to steady the tottering global economy.

The Bank of England’s action drops the base interest rate from 5% to 4.5%. The European Central Bank cut its rate from 4.25% to 3.75%, and the central banks of Canada, Sweden and Switzerland all took similar action. The US Federal Reserve has trimmed rates from 2% to 1.5%. China also cut its rate, but only by 0.27%.

This unprecedented coordinated global action comes amid tumbling world stock markets. European financial markets reacted favourably to the news, pulling back some of the losses.

In another major development, the UK government unveiled a package of measures aimed at rescuing the banking system. The total cost could add up to a whopping £500 billion.