Interest rates will have to fall sharply on both sides of the Atlantic if central bankers are to help prevent a recession led by rising oil and food prices, falling house prices and a tighter credit climate, reports The Guardian .
Merrill Lynch said that US interest rates will have to fall to 2% over the next two years as the Federal Reserve tries to boost an economy on the brink of the first consumer-led recession since 1991. Consumers, it said, were facing huge headwinds from a combination of "punishing" oil prices, tighter lending standards and rising unemployment. The investment bank also forecast that the Bank of England's monetary policy committee will announce the first of three quarter-point cuts when interest rates are set tomorrow. The MPC has so far been cautious about cutting rates too early in face of...
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