I'm a bit behind on this story, but Calculated Risk was right on top of it. So was The Skeptical Spectator. But just in case you haven't heard, here it is, from the London Times Online:
In a move widely predicted by the City and immediately hailed by business leaders, the Bank’s nine-member Monetary Policy Committee (MPC) cut interest rates by a quarter of a point, to 4.5 per cent.
The Bank’s verdict came after recent official figures showed the economy cooling rapidly, with growth in the second quarter of the year dropping to its weakest in 12 years.
That makes this report, also from the Times, sort of interesting:
INDUSTRY received a boost after figures showed it slowed in the second quarter by less than previously thought, as a survey of confidence and new growth estimates suggested the economic slowdown could be easing.
The data, which were broadly more positive than expected, came the day after the Bank of England cut interest rates for the first time in two years. Taken together, they gave an early hint that the Bank may not need a follow-up rate cut in the short term to boost growth.
On the other hand, there is not-good news on household balance sheets, which was also highlighted at Calculated Risk. From yet another Times article:
THE number of Britons declaring themselves bankrupt each year is set to hit 100,000 for the first time as official data yesterday revealed the highest quarterly figure for at least 40 years...
The figures provide the latest evidence that more Britons are struggling to repay their borrowings. High street banks revealed this week that they have been forced to increase provisions for bad debts as customers increasingly default on loans.
Though the figures, from the Department of Trade and Industry, include bankruptcies among small business and sole traders, 80 per cent comprise consumer debtors — people who have amassed huge sums on credit cards, store cards and on other personal borrowing.
The Bank's Monetary Policy Committee did not cite this concern in their immediate comments, but next week a more detailed explanation will be provided when the quarterly Inflation Report is released. Should make an interesting read.