The Bank of England today cut its minimum lending rate to 0.5%. Another record low, since its foundation in the 17th Century. Given that in that time we've had two Jacobite rebellions, fought two World Wars, seen off Napoleon and built and lost a global empire, the record low interest rate gives a measure of the current crisis. So much for Gordon Brown's claimed ending of the business cycle.
At the same time, the Bank will also pour £75 billion worth of extra currency into the nation's monetary supply. This represents 5.4% of GDP. Poor old Milton Friedman and Sir Alan Walters must be turning in their graves.
The implication for the financial services markets has yet to be assessed. You can still get 3 or 4% on your savings. And very few people are benefiting from super low mortgage rates. Interestingly at this precise time the FTSE is showing a fall of 3.0% against last night's close.
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