The Bank of England has cut interest rates as the European Central Bank (ECB) looks set to hold tight - for a short while at least. The Bank of England reduced its benchmark rate by a quarter of a percentage point to 5.75 per cent yesterday, the first cut in 20 months, in an effort to extend its economic expansion.

The Bank of England wants to reduce the risk that a slowdown in the US will spread to the UK. In its monthly report, the ECB has again modified its stance on inflation, hinting at rate cuts to come. It points out that "the risks to price stability from the monetary side have become increasingly balanced".

Blair's euro signal good news for us, main paper