Interest rate decision – how low will they go?

The Bank of England is today charged with the arduous task of staving off a deep and prolonged recession by cutting interest rates.

With the slump in oil, food and house prices threatening a damaging spiral of deflation, the Bank, it is agreed, must act quickly and act decisively.

So how low will interest rates go?

Larry Elliott isn’t sitting on the fence or anything, but he reckons the cut will be between 1 and 1.5 percent.

The Time’s Gary Duncan says that two thirds of City analysts are betting on a 1 per cent cut. And if there’s one thing that City analysts know how to do, it’s bet.

$1.48 to the pound is not yet a crisis, according to the Telegraph. Another halving of interest rates should precipitate that.

While we’re on the pound, the Independent’s Jeremy Warner argues that it has been too high recently. Interest rate cuts should go some way to addressing the balance.

The FT reports that bumper rate cuts have already begun in Sweden. They’ve only gone and cut 175 points, making even the most radical City analyst look a little soft.

Bloomberg have solved it. It’s definitely going to be 1 percent. You heard it there first…

But the markets are not so sure, according to City AM.