Decisive central bank action bolsters lukewarm response to rescue plan

The BoE, which had been due to meet tomorrow, has cut the UK base rate by 50 basis points to 4.5%, while the ECB, which left the main repo rate unchanged at its monthly policy meeting last Thursday, has also produced a half-point cut, to 3.75% (effective 15 October). The Fed slashed its already low rate from 2% to 1.5%, and Switzerland, Sweden and Canada followed suit. China has also announced a 27bps rate cut. The market had been calling for a 50bps cut from the BoE tomorrow, but the shock timing caused a brief rally in a London market unimpressed by the UK government’s bank bailout plan,...