The Bank of England Base Rate was reduced a further 1% to 2% on today. The Governor invited the Committee to vote on the proposition that Bank Rate should be reduced by 1.0 percentage points to 2.0%. and the Committee voted unanimously in favour of the proposition.
In the United States, a number of indicators had suggested that the slowdown was intensifying. The latest release of the Q3 GDP data had confirmed a small fall in output and the latest monthly data were consistent with a larger fall in the fourth quarter. Declines in both the manufacturing and non-manufacturing had also been very downbeat.
Monthly figures for US consumption expenditure had fallen for five successive months. There as no sign yet of any turnaround in the US housing market, with a large overhang of unsold homes, house building at a 50-year low and house prices falling. The labour market data for October had shown a large fall in employment.
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