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BoE and ECB Interest Rate Decisions

This week is sure to be an exciting one in the markets. It marks three months since the start of the credit crisis and we have interest rate decisions from the Bank of England and the European Central Bank (ECB). The question is, after three months of wobbly markets, do the Banks think the credit crisis has made the blindest bit of difference?

Serious, dour, level-headed - sounds about as much fun as a wet weekend in Prestatyn, but these are the characteristics you want to see in a member of the Monetary Policy Committee (MPC). Not for them the flamboyance and whimsy that infects many a market trader's temperament. And when the sensible folk on the MPC look at what the credit crisis has done to the UK economy, they may well conclude "Crisis? What crisis?"

The fact is that there has been a necessary readjustment in the price of credit, but so far it hasn' t really affected the wider economy. Quarterly GDP growth has been above trend for seven quarters and the annual rate is now 3.3%. The latest housing figures point to a soft landing at the worst. Consumer confidence has been shaken but not destroyed.

The US Fed. had to cut rates last week because the US economy is in a right state, with their sickly housing market at the centre of their problems. Like all things American the decision to cut rates was big, brash and bold - and possibly bone-headed if indications of mounting inflationary pressure prove correct. The UK economy is like in a whole other place right now.

Indeed, comparatively we are in rude health back here in Blighty - so much so that the credit crisis feels like a blip. In the short term, an interest rate cut by the MPC might send the FTSE in to freefall with traders panic that the Bank knows something they don't - something BAD.

The ECB are probably even less concerned about the credit crisis and more concerned about inflation. The last three months has seen Euro-zone inflation ramp up from 1.7%, to 2.1% to 2.6%. This inflation is being driven by energy costs - not least the skyrocketing price of oil. To control things a rate hike looks on the cards, which will monkey with the currency rates like nobody's business.

Credit crisis, rates, indices, oil, currencies - it's a tangled web and things could all change around this week. And at ChoiceOdds.com there is a chance for you to turn market movements into money - why wait?

Lies, Damn Lies and ...

On 91% of trading days last month, the FTSE and DAX moved in the same direction on the day.



In October the FTSE added 3.9%, the DAX 2.01% and the DOW only 0.25%.



Since the credit crisis began, the DOW has moved more than 300 ticks on the day on 4 occasions - 3 times down and once up.



On average a piece of string is 250m long.

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