US and European banks slash rates

Those thinking of investing in property in the USA or the eurozone could find themselves paying a lot less than they might until now if they take out a mortgage to fund the purchase.

It was announced today that the European Central Bank (ECB) and the US Federal Reserve had both cut their interest rates by half of one per cent.

The action was a concerted one that also saw the Bank of England undertaking the same move a day earlier than its latest decision was due, while the central banks of Canada, Switzerland and Sweden lowered their base rates by the same amount.

In America the Federal Reserve board voted unanimously to cut the Federal Funds Rate to 1.5 per cent, while the ECB said it is lowering the minimum bid rate from 4.25 per cent to 3.75 per cent.

The ECB move may help boost the market in countries such as Spain, Cyprus, France, Portugal and Italy.