“Steady & Low Interest Rates in European Banks”

The Bank of England and the European Central Bank have kept their interest rates unchanged. Bank of England’s interested rate has been held at 0.5% for the last seven months and the European Central Bank has stayed at 1%. This has some economists concerned because the economy in Europe, but especially England, has yet to see a turn around. Unlike some of Europe’s other countries (Germany and France) England has not shown any signs of rising from the recession. Germany still has concerns though. If the value of the euro continues to rise the exports will be more expensive, and exports are extremely important to Germany.

The interest rates in Europe have been kept low for multiple reasons, one of which is to help small & medium-sized enterprises maintain access to finances. While reviewing this article I found this topic the most interesting. Europe seems to be taking a completely opposite approach with their finances than that of the United States. It seems that in the United States the interest rates are continuing to rise as to prevent people from borrowing more than they will be able to afford to pay back.

This article arouses some thoughts for me. Which economy will recover from the recession quicker with these opposite ways of thinking? And how will they compare to one another? These things are yet to be determined since all of these economies are still struggling in the recession. However, as they do rise out of the recession over the next couple of years this information will be interesting to compare.

Christy Scherzer