By TraderVox.com
Tradervox.com (Dublin) – The Bank of England and the European Central Bank are set to signal the start of a zero-rate era, as they move to shove their respective economies to growth. The market has seen an increased number of central banks around the world cutting interest rates as the global economy continues to worsen. The BOE and ECB officials will be making their rate decisions later today where major changes are expected.
The ECB is expected to push its interest rate further down by 0.25 percent to register a new low record since the currency was started. The central bank is also expected to drop its deposit rate to zero as it seeks ways to prevent further economic deterioration in the region. In UK, Mervyn King is expected to push for an expansion of the BOE’s bond purchases target by 50 billion pounds as efforts to prevent further deterioration in the country’s economy.
JPMorgan Chase & Co which has announced a decreased interest rate of about 0.5 has indicated that major central banks have resulted into frantic measure to prevent possible crisis. According to Joseph Lupton of JPMorgan in New York a large part of the world’s economy have stagnated forcing central banks to engage easing measures. Central banks in US, China and Australia which acted last month and they are set to be joined by the ECB and BOE as the former is predicted to lower interest rates at 1:45 PM today; BOE will announce its monetary policy at noon in London today.
According to Joseph Lupton, the debt crisis in Europe is the major reason most of these banks are making these adjustments. He also added that most of the central banks in the developed countries will miss their inflation targets by the end of the year.
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