8 May 2001
Foot-and-mouth helps bank rate cut

By FWi staff

INTEREST rates are set to fall – partly as a result of the foot-and-mouth crisis which has hit growth across the British economy.

The Bank of Englands Monetary Policy Committee, which sets the banks interest rate, will end its two-day monthly meeting on Thursday (10 May).

The Financial Times reports that Bank of England governor Sir Edward George has warned that foot-and-mouth disease has hit confidence.

“Domestic demand growth has remained relatively robust into this year but we too are affected by the US slowdown,” Sir Edward is reported as saying.

In addition, the effects of foot-and-mouth have been felt much wider than just the agricultural sector, he told the Swiss Institute of International Studies.

Most economists are debating not whether interest rates will fall at the monetary committee meeting but by how much, the FT reports.