Interest Rates Could Hit 1 Per Cent Next Week, in Another Blow to Savers
THE TELEGRAPH: Interest rates, already at their lowest level in history, are expected to fall yet further next week to 1 per cent, hitting hard pressed savers.

The Bank of England's monetary policy committee is meeting on Wednesday and Thursday to decide on whether to cut interest rates once again, to stave off the worst of the mounting recession.

If it does so, it will be the fifth month in a row it has cut rates. It has already slashed them from 5 per cent at the start of October to 1.5 per cent, the lowest they have been since the Bank was founded in 1694.

In recent weeks the economic data has worsened, with more and more businesses forced to axe staff, shut down factories and delay investment.

However, a further cut would be a severe blow to savers, who are already suffering from a dearth of good savings accounts. >>> By Harry Wallop, Consumer Affairs Editor | Friday, January 30, 2009

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China Slashes Interest Rates as Panic Spreads
THE TELEGRAPH: The People's Bank of China cut interest rates by more than 1pc point as the economy crumbles and millions of jobs are predicted to go ahead of Christmas.

The move came just one day after the World Bank predicted that China would grow by 7.5pc next year. The level of growth may appear robust by Western standards, but it would represent the slowest economic expansion in China for the last two decades.

It is also perilously close to the 7pc minimum level of growth that Chinese economists believe is necessary in order to create enough jobs for the 6m university graduates who will enter the jobs market next year.

It is the fourth interest rate cut from the Chinese central bank in the last ten weeks as the government desperately battles an evident economic collapse. "China is out to save itself here," said Patrick Bennett, an analyst with Societe Generale in Hong Kong.

The PBOC reduced its main borrowing rate by 1.08pc points to 5.58pc, the biggest one-off cut since the Asian Financial Crisis in 1997.

In recent weeks, a series of riots across central and southern China have flowered as disgruntled employees aired their grievances at the downturn.

Today, around 500 protesters rioted at the Kai Da toy factory in Dongguan in the Pearl River delta, flipping over a police car and trashing computers in a dispute over payoffs to 80 fired workers. Tens of thousands of factories across the region have already shut their gates.

Yin Weimin, China's Social Security minister, has revealed that employment is the Communist Party's number one concern in the downturn and said the "situation is critical". Unemployment is expected to rise from 4pc to 4.5pc by the end of the year and anecdotal reports have suggested that 3m people have already been fired in the industrial province of Zhejiang alone. >>> By Malcolm Moore in Shanghai | November 26, 2008

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Further Cut in US Interest Rates
BBC: The Federal Reserve has cut its key interest rate from 2.25% to 2.0% as it aims to avoid a possible US recession.

It is the seventh rate cut since last September, when the federal funds rate was cut from 5.25% to 4.75%.

Opinion was divided about whether the Federal Reserve's statement indicated that this would be the last cut in interest rates.

The economy has been hit by a housing market downturn and some analysts believe it is already in recession.

"This the seventh cut from the Fed since September and the committee will obviously be hoping it can be the last," said BBC economics editor Stephanie Flanders.

"The fact that today's GDP figures showed positive growth in the first quarter offers some grounds for hoping that the US will not see two quarters of negative growth this year, at least if the fiscal stimulus package works as intended and boosts spending over the summer." Further Cut in US Interest Rates >>>

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