Had six central banks not agreed to cut interest rates by the same amount today –50bp – I suspect the Bank of England would have gone lower. We’re at 4.5% now but we’re probably on a downward track to 3.5% or even 3.25%. Great news if you’re on a variable mortgage anchored to the base rate, but we’ll see how the interbank rate reacts. There is still much we have to learn, including how this £50bn bank bailout will be financed. Darling’s Mais lecture is tonight (delayed from last night) where he’s likely to tell us about a new set of rules for the age of debt which will dominate the next government.
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