"Sweden cuts interest rates to 2%"

Sweden is acting to ease the effects of the global downturn and Sweden's central bank has cut its key interest rate by a record 1.75 percentage points to 2%.

The Riksbank said the move was intended to "dampen the fall in production and employment" caused by the global financial crisis.

The Riksbank said it thought the rate would remain at the same level throughout 2009.

The decision, which came two weeks earlier than expected, followed a half-point cut last month.

Elsewhere in Europe, Bank of England policymakers have cut UK rates to their lowest level for more than half a century, with a one-point reduction to 2% - a level not seen since 1951.

And the European Central Bank's governing council, meeting in Brussels, is expected to reduce rates by at least half a percentage point from the current level of 3.25%.

I think that a fall in the interest taxes can increase economic growth, at least in the short term. However, the growth may be unsustainable, especially if interest rates rise in the near future. There is also a danger of increased consumption causing inflation.

Alot of people think that this fall of taxes will help them with the mortatges pay, but I think that this action isn’t the correct solution. One example was the japanese deflation in 90s.

Iris Baño