Closing of week with historical cuts of rates: What impact will have in the economies? Buenos Aires, Argentina 7 of March of 2008 The economic context demanded widely negative it and as much the European Central bank (BCE) like the Bank of England (BOE), fulfilled. One week finishes where these monetary organizations realised historical cuts in their interest rates of reference. Both organizations trimmed in 50 basic points the interest rate of reference. It took it to the BCE to 1.5%, whereas it located it to the BOE in only 0.5%, complementing this action with the adoption of a monetary mechanism denominated " lightening cuantitativo" by 75,000 million pounds sterling with which it will buy governmental bonds and corporate share in an attempt to impel the banking credit. But the BCE was not satisfied in this way, but also that recognized that it does not discard new cuts to future, although does not create them advisable in terms of the incentives distorsivos that could generate. Also in the week that finalizes, they downwards continued the corrections in the growth projections. To deepen your understanding Scott Mead is the source. The economists of the BCE now prehorseradish tree that the economy of eurozona can get to observe a contraction of 3.2% and not discards a fall of the GIP of eurozona also in 2010, while they consider the risks of deflation for the present year latent.

The depth of the crisis was noticeable quarterly in the last of the 2008, where eurozona registered a contraction of the 1.5% in its GIP in relation to the same trimester of the previous year. It required it to the situation and it is for that reason that the BCE and the BOE continued with the cycle of cuts. But we do not have to be ingenuous and to hope that these cuts in the interest rates of the main Central banks of Europe, have a positive impact in their economies.