Interest Rates Cut to 5.25%
February 7th, 2008
The stockmarket is always one for over-reacting and the response to the 0.25% interest rate cut is no different. Yes a 0.5% reduction would have reaped immediate rewards, but I applaud the Bank of England for taking a measured approach, (completely different to that of the US Federal Reserve) and long-term the markets will be grateful for these controlled steps.
Make no mistake, the stockmarket will shrug off this rate change and for the time being will remain blinkered about its economic woes. There will be further interest rate cuts ahead and these will slowly start to feed back the much needed positive drive into the market. The negativity will continue for a number of months, however the sophisticated investor will soon recognise that opportunities are emerging which will reap rewards within the next few years. Once this bandwagon starts, the only way is up.
Author: Philippa Gee
February 7th, 2008
Category: General, Investments.
