Base rates should be cut by 1pc tomorrow, which would enhance the MPC's reputation and demonstrate that it grasps the urgency of improving the dire state of markets, according to Douglas McWilliams, chief executive of cebr.
With the UK economy almost certainly in recession, McWilliams added that, when confidence was the key issue, early, decisive action was the most effective response. "Begrudgingly taking action following the response of other countries and only doing so in a limited fashion, will normally do little to restore confidence," he said. McWilliams suggested that the UK authorities had so far given the impression of being taken by surprise by events. He contrasted this with the response of the US authorities. "The US has moved ahead of the game to bail out banks and to cut interest rates," he...
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