Bank of England considering more rate cuts

LONDON, Jan. 16 (UPI) -- Bank of England Deputy Gov. John Gieve said interest rate reductions and other measures would be considered to head off a "difficult year."

"2009 is certain to be a difficult year for the U.K. and the global economy more generally," Gieve said in a business meeting Friday, the Daily Mail reported.

Gieve said the British economy is expected to experience "the sharpest fall in output for decades, while on some measures retail prices are likely to fall for the first time in almost a decade."

"The main challenge now is to prevent a deep recession from being unnecessarily long," he said.

The Bank of England has cut the rate from 5 percent in mid-October to 1.5 percent, a 315-year low.

'Nearly all economic policy decisions work with a lag, so there is a limited amount we can do at this point to influence the path of output in the first half of this year," Gieve said.