clock menu more-arrow no yes

Filed under:


Commuters outside the London underground walk past a sign announcing Britain's new interest rate Tuesday morning. The Bank of England cut its base lending rate from 10 percent to 9 percent, a four-year low, giving some relief to homeowners and businesses struggling in the country's worst recession since World War II. The move comes after currency upheaval in the 12-nation European Community last week forced Britain out the European Monetary System, which aims to coordinate EC currency values. The monetary crisis complicates the prospects of a new EC accord to establish common policies and a single currency by 1999. French voters nearly rejected the Maastricht treaty on Sunday, prompting leaders to schedule emergency summits to address concern the accord would undermine national sovereignty. Britain apparently decided that the benefits of lower interest rates are a worthwhile gamble for its economy. But some economists believe the pound will be further devalued, leading to stronger inflation.