The European Central Bank, US Federal Reserve and Bank of England have all cut their key interest rates by half a percentage point.
The ECB interest rate now stands at 3.75%, the Bank of England rate is 4.5% while the US Federal Reserve’s key rate is down to 1.5%
The US Federal reserve said it cut the rate ‘in light of evidence pointing to a weakening of economic activity and a reduction in inflationary pressures.’
In a joint effort to stem losses coming from the financial markets crisis coordinated action has been taken by the world’s central banks.
The Bank of China, the Bank of Japan, the Bank of Canada, the Bank of Sweden and the Swiss National Bank have cut interest rates by 50 basis points or 0.5%.
The Governor of Ireland’s Central Bank, John Hurley, said the move was aimed at addressing the global lack of confidence in financial markets and institutions.
He said that, at a time of weakness in the Irish economy, the move should help to cut business costs and ease the repayment burden on mortgage holders.
He said it would also encourage investment and reduce strains on financial markets.
