“The half point interest rate cut to 3.25 per cent, announced by the ECB, is disappointing following the shock cut to 3 per cent announced earlier by the UK's MPC. Though the ECB's move signals some threats of recession in the Eurozone, it highlights a very sharp contrast with the UK's approach. It is regrettable that we have not seen better coordination between the two central banks.
"The fact that official interest rates in the ECB are now higher than in the UK increases the risks of future negative speculative pressures against Sterling, and may reduce the scope of further MPC cuts.
"It is now critical to ensure that UK businesses and consumers benefit fully from the big MPC cut. But interest rate cuts on their own will not suffice to alleviate the recession. The big MPC cut announced today must not deter the Chancellor from introducing much helpful fiscal measures in the Pre-Budget Report."