LONDON—With increasing calls for the Federal Reserve to reduce interest rates—including some calls that it make a move before its next scheduled meeting in September--the Bank of England cut its key interest rate for the first time in more than four years last week.
Cooling rates of inflation and, in the case of the U.S., a reduction in job creation as reported in the most recent Labor Department numbers—have been driving the calls for rate reductions.
The U.K. central bank lowered its benchmark lending rate by a quarter-percentage point to 5%.
“It had kept rates at their highest levels since 2008 for the past year, crimping lending and heaping pressure on the U.K.’s heavily indebted government,” the Wall Street Journal said in its analysis.
50 Point Cut Possible
In the U.S., some believe the Federal Reserve could reduce rates by 50 basis points, rather than 25, at its September gathering, including one credit union economist.