London - The Bank of England on Thursday cut interest rates to the lowest level in its 315-year history, taking it into uncharted territory as it attempts to ward off a prolonged recession.
The half point cut in interest rates - to 1.5 percent - sees the central bank nearing the limits of conventional monetary policy after trims totaling 3.5 percentage points since the beginning of October and as Britain faces its bleakest year since the early 1990s recession.
The bank's nine-member monetary policy committee said the world economy "appears to be undergoing an unusually sharp and synchronized downturn." "Measures of business and consumer confidence have fallen markedly," it said in a statement accompanying its decision. "World trade growth this year is likely to be the weakest for some considerable time."
The half a percentage point cut was less dramatic than the 1.5 point trim it announced in November, and lower than the 1 point cut expected by some economists -- but still brings the rate down to the lowest level since the Bank of England was founded in 1694.
The move follows aggressive cuts by other central banks. The U.S. Federal Reserve has already slashed its key interest rate to a record low, at a range of zero to 0.25 percent, while the Bank of Japan has dropped its rate to almost nothing, at 0.1 percent. Ye olde linke
To put that into perspective, they were hanging witches in old Salem, the United States was almost a century away, the Dodo had just become extinct and Isaac Newton had just discovered gravity. Johann Sebastian Bach was in his prime. It is my sincerest hope that three hundred years hence, someone will be able to look back on our times and find them half as historically monumental and a fraction as intellectually productive.