The US Federal Reserve today cut interest rates by a half percentage point and it left the door open to further reductions if needed.The unanimous decision takes its target for overnight bank lending to 1%, the lowest since June 2004. Wall Street was united in the opinion the Fed would lower rates, although opinions were split on the likely size of the move.
"The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures," said the Federal Open Market Committee headed by Ben Bernanke (above) after the unanimous decision. "Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending."
The U.S. central bank has cut benchmark overnight rates from 5.25% in nine steps over the past 13 months to counter a financial storm that started with the collapse of the U.S. mortgage market and spread around the world.
Fears of an acute recession have pushed U.S. stock prices down sharply during October, although equities enjoyed a large rally Monday. The blue chip Dow Jones industrial average was up before the Fed's decision, but turned lower after the central bank's announcement.
The Bank of England has cut interest rates by one percentage point, from 3% to 2% - the lowest level since 1951. 
The Bank of England’s Monetary Policy Committee has today voted to cut the official Bank Rate paid on commercial bank reserves from 4.5% to 3%.
