There is some good news for UK householders amongst the gloom of the current financial crisis:

The US Federal Reserve last night led the way in a series of interest rate cuts aimed at heading off a deep and prolonged global recession when it reduced borrowing costs to 1%. Source: The Guardian.

The Question is how low can UK interest rates go? The last time the US rate was at 1% was in May, 2004 at that time UK interest rates where rising from 3.5% in August, 2003 to eventually peak at 5.75% in July, 2007. This time we’re in uncharted territory, some commentators predict rates at 3% which would be the lowest since May, 1954 – still that’s a cut of just 1.5% on current rates, somehow not enough – I’m feel that at least a couple of percentage point cuts are required which means just 2.5% not seen since Nov, 1951.

Source: The Bank of England.