British Economy Hit by U.S. Housing Market Woes
The troubles in the American housing market are rippling across the Atlantic. European central bankers worry their economy could slow down. The Bank of England and the European Central Bank announce decisions on interest rates.
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RENEE MONTAGNE, host:
The troubles in the American housing market are rippling across the Atlantic. European Central bankers worry their economy could slow down. Today, in response to signs of slowing growth, the Bank of the England decided to cut its main interest rate by a quarter of percent to five and a half percent. The Organization for Economic Cooperation and Development also reduced its forecast for economic growth in the developed world for next year.
The BBC's economics correspondent Andrew Walker reports.
Mr. ANDREW WALKER (Economics Correspondent, BBC): There are growing concerns about the global economic outlook. The Bank of England's rate cut was prompted by signs of weaker economic performance and of credit being harder to get for businesses and households.
The initial spark for recent concerns came from homebuyers in the United States failing to repay loans. The Organization for Economic Co-operation and Development has cut its forecast for growth in its mainly rich member countries. But at 2.3 percent, it's still not bad, according to one senior OECD official.
The European Central Bank, meanwhile, has left its interest rates unchanged. It apparently is more worried about rising inflation than slowing economic growth.
MONTAGNE: The BBC's economics correspondent, Andrew Walker.
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