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CBI in renewed call for UK interest rate cuts

In the aftermath of the fall of the famous Lehman Brothers and the immediate affect which it has had on the money markets - not unlike the impact the market felt as the credit crunch began - the CBI has called on the Bank of England to throw caution to the wind and reduce UK interest rates. The confederation believes that unless action is taken before the end of 2008 the UK will encounter a prolonged period of economic uncertainty with dire consequences.

As we await the release of August inflation numbers the call from the CBI is for a half point cut in November and a follow-up half point cut in early 2009. The feedback from members of the CBI indicates that the economy has taken a further lurch downwards over the last few weeks and consumer and business confidence is literally shot to pieces. The fact that funding will be more difficult to come by over the next few months is sure to crank up the pressure on business balance sheets and more are expected to 'go to the wall'.

The US government took drastic action with regard to the US mortgage crisis - is it now time for the UK authorities to make a bold move?

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