UK/Euro rates: cutting at the deflationary monster

Today’s big interest rate cuts by the UK and European central banks are as essential as the colossal cuts made last month, and equally belated. The Bank of England and European Central Bank are at last attacking the deflationary monster they helped to create. But the fight is going to be long and bloody. The cuts today will not be the last, and rates will go to 1% - perhaps even to zero by the middle of 2009, if economic deterioration persists. Europe is facing the sort of deflationary Franken...