Politics 114: Political Change in Western Europe

http://news.bbc.co.uk/2/hi/business/7713006.stm

This article details The Bank of England’s dramatic interest rate cut. The one and a half percentage point cut dropped interest rates to 3%. The main motive behind the cut is the looming recession, and the possibility for the recession to last a long time. Banks were surprised by the size of the cut, and now face the decision of how much relief to pass onto consumers. Business bodies and trade unions also appeared pleasantly surprised with the move from the BoE saying: “It shows the Bank now understands that the problem is recession not inflation.” The latest numbers on the UK’s economy show a decline in the service sector, which is both surprising and disturbing, because it is the backbone of the UK’s economy.