SWFs to boost global liquidity
5 Dec 07

Tomorrow, the Bank of England will announce their interest rate decision. As I have consistently argued, a rate cut of 0.25% is necessary and is echoed in a brilliant article by Anatole Kaletsky of The Times today.

He points out that the difference between the LIBOR and the Base rate is usually at around 0.1%, but the LIBOR currently stands at around 1% above. A small difference shows that MPC rate decisions are being reflected in markets elsewhere but this opening gap shows that the money markets have been spooked so much by the recent credit crunch that they seem not to pay attention to the MPC decisions.

Links:
The Bank better get this right - Anatole Kaletsky, The Times (6 Dec 07)