Bank of England base rate

In a dazzling display of dour predictability the Bank of England today
cut rates by the expected 0.25% to 5.0%.
This was a good opportunity to finally take the gloves off and knock at
least a half point off the Base Rate in order to have a more substantial
effect. In reality this quarter point cut will not have a massive effect
as it will just go part of the way to offset the larger hikes in
interest rates that lenders themselves have initiated over the past
weeks. There is also no guarantee that lenders will even pass on this
cut to customers, unless they are already on a BoE base rate tracker
product.
The problem is still that many lenders are funding their products from
the money markets, and the cost of borrowing on this basis remains
artificially high reflecting the current issues attributed to the liquidity crisis. So the Bank of England Base rate is actually having a minimal effect.
What is really needed is a more severe cut in rates coupled with a positive pumping of funds into the financial system to help restore liquidity.
But the BoE are still mainly concerned with inflationary pressures when many critics argue that they should also be concerned with asset prices, such as the housing market, as well.
To quote the famous economist JM Keynes, as many others are already
starting to do, this quarter percent cut, although a step in the right
direction, will have as much effect as pushing a piece of string.