BOE Cuts Base Rates By Half Point

The Bank of England has cut base rates by half a percentage point to 1.5%.

UK interest rates are now officially the lowest since King William III created the bank in the 17th century.

The pound was unfazed by the move, which was widely anticipated, and even appreciated slightly in the aftermath of the announcement. At 12.10GMT sterling was $1.5166 against the US dollar and 1.1182 against the euro.

Currency traders' attention now switches to Europe, where the ECB are also widely expected to cut rates next on Jan 15th.

The general mood in the market seems to suggest that, having been slightly more cautious than the BOE recently, maybe a slightly more aggressive stance will be adopted by the ECB next week.