Interest rates, exchange rates and annual holidays

As expected, the Monetary Policy Committee of the Bank of England has cut the base rate by 0.25% today.

Revision Mind Map: Monetary Policy

Designed for AS and A2 Economics students, this mind map is attached below in mmap and pdf format.

AS_Monetary_Policy.pdf
Monetary_Policy.mmap

UK base rates held at 5.25% in March

The Bank of England held official short term interest rates at 5.25% at the end of the March meeting of the MPC. I will be streaming the March edition of The UK Economy in Charts later on this evening.

Another cut in US interest rates

The United States Federal Reserve has once more moved to lower interest rates in an aggressive move to bolster confidence and demand in their flagging economy. This BBC news audio-visual clip looks at the immediate market reaction. Just about every macroeconomic policy lever is now being pulled in terms of monetary and fiscal policy and it will be fascinating to see what impact the loosening of macroeconomic policy has on the economy.

Ben Bernanke has indicated that he is prepared to cut rates even further if necessary, a stark contrast to the inactivity at the Bank of England. The fact is that the drivers of monetary policy decisions in the United States tend to err on the side of economic growth whereas the sober bankers on the Monetary Policy Committee take a sterner line on inflation risks. Whose side are you on?