Thursday, February 5, 2009

Interest Rate Announcement

The MPC or monetary policy committee meeting today is 1 week early due to conflict with the budget speech next week...

What does a drop in rates mean for the stock market? Well, for one it should allow fundamentally more spending by the consumer. This frees up monies otherwise tied up in servicing the high debt level the consumer is burdened with.

Generally, banks and retailers benefit quite a bit from a rate cut. But the overal economy will benefit here to because of the heightened debt burden.

Keep an eye on the banks and the general retailers. As I write this post the market is turning green on my screen! The power of the interest rate...


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