It seems a lifetime ago that we were talking about "Cool Britannia" -- the once stuffy UK finally got its groove back about a decade ago and its economy was on a tear and the envy of nearly all of its EU partners. With the current banking crisis, of course, all that has come to a crashing halt and people in Great Britain and Northern Ireland are genuinely worried about what's going to happen next.
This morning the Bank of England made a shocking 1½% interest rate cut down to 3%, the lowest in 53 years. Most of High Street was expecting a ½ to ¾% reduction so this must mean desperation on the part of the central bank there, to get money moving again.
How will this affect America? Hard to say but it can't possibly get as bad as Japan, where the interest rate there is now minus 0.3% -- you actually lose money if you loan it to the government.
At least we hope it doesn't get as bad as Japan.
UPDATE (10:46 am EST, 1546 GMT): Following on the above interest rate cut, the European Central bank cut its rate by ½% to 3¼%; while Switzerland cut its rate to 2% from 2½%. Not a good sign, folks.
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