Interest rate cut to prevent 'prolonged' recession

News Article - Friday, October 10, 2008

filed under: Business

Accounting giant PricewaterhouseCoopers has welcomed the interest rate cut, saying that it will help to prevent a "prolonged" recession.

The Bank of England and five additional UK banks cut interest rates by half a per cent earlier this week in a bid to restore balance to a global economy that is reeling from last year's credit crunch.

In addition to the cut, the government a £400 billion bail-out package designed to breathe life back into the UK's banking system.

John Hawksworth, macro-economic adviser at PricewaterhouseCoopers, said: "We welcome this co-ordinated global move to cut interest rates, together with the bank recapitalisation plan announced by the UK government."

Mr Hawksworth added that the move would probably not be enough to prevent the UK economy from sliding into technical recession, as all this requires is for zero overall economic growth, rather than business growth, to be reported in the third quarter.

However, recession may be curbed instead.