England, Denmark Cut Rates
Jan. 07, 1999
LONDON (AP) _ Britain cut a key interest rate Thursday for the fourth time in as many months as it continued to try to ward off recession.
The Bank of England voted to reduce its base lending rate for loans to commercial banks to 6 percent from 6.25 percent. The move followed cuts of a half percentage point in November and December, and a quarter percentage point cut in October.
The announcement was met with some disappointment among manufacturers and unions that had been hoping for another half-point cut.
There also was some relief, however, since many analysts had predicted the bank's Monetary Policy Committee would leave rates unchanged to give it a chance to assess economic data due over the next few weeks.
In a statement, the committee members said recent evidence pointed to a continuing slowdown in the economy, while the risks of more international turmoil ``remain clearly on the downside.''
They also indicated they expected to see more job losses.
Following the bank's announcement, British building societies and banks began announcing a quarter-percentage point drop in mortgage rates.
Separately, Denmark's central bank cut its key securities repurchase rate on Thursday by 0.2 percentage points to 3.75 percent.
The move came because the Danish krone ``is strong and stable and has been so since the introduction of the euro,'' Kirsten Mordhorst, a deputy central bank governor told Danish radio.
The euro, the European Union's joint currency, was introduced on Jan. 1.
Denmark and Britain are among four EU members staying out of the monetary union for the time being. Interest rates in both countries are higher than in the 11 EU countries forming the eurozone.