The British economy risks following the US into a slowdown unless interest rates are cut sharply in the next few months, one of the Bank of England's monetary policy committee members warns today, The Guardian reports.
In an interview with the Guardian, Professor David Blanchflower said the Bank needed to learn from the US federal reserve and take pre-emptive action to prevent growth from stalling.
Blanchflower, who was the sole dissenter calling for another interest rate cut this month while his colleagues voted to leave rates steady at 5.5%, said: "Worrying about inflation at this time seems like fiddling while Rome burns."
WALL STREET IS expecting the US Federal Reserve to cut interest rates by another half a percentage point to 3% when it meets tomorrow and on Wednesday, which would push down the cost of borrowing in America by almost a third in just over a week, according to The Times.
New York’s Treasury bond market has already priced in a cut of 50 basis points in US interest rates as increasingly Ben Bernanke is perceived as a Fed Chairman keen to meet the expectations of a nervous financial community.
Last Tuesday, the Fed moved to cut interest rates by three quarters of a percentage point to avert a crisis in the bond insurance market and to address anxieties on Wall Street that the United States is on the brink of a recession.
THE HEAD OF Société Générale's investment banking division has insisted the bank is strong enough to survive, despite admitting the it missed several opportunities over the past year to stop a €4.9bn (£3.7bn) alleged fraud, The Telegraph reports.
Jean-Pierre Mustier said yesterday that he had received "incredible support" from his counterparts at rival banks as well as from clients, whom he said had been pushing more business his way "as a sign of solidarity".
While admitting that unwinding the positions of rogue trader Jérôme Kerviel did have an impact on last week's stock market falls, he said it was "limited".
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