Australia cuts interest rates by 1%: so should we

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Australia has cut interest rates by 1%.

In the UK Alastair Darling pleads with Mervyn King to cut rates but is doing nothing to back up his pleas. There is no guarantee King will listen. It seems he'd rather watch London burn. And Darling pretends there is nothing he can do about that.

There is. The government gave the Bank of England the right to set rates. It can take it away again. Tomorrow might be a very good time to do that.

And we don't need a cut of 1%. Vince Cable has suggested 2%. He's right. Nothing less will do. I'd go for more: 3% would create solvency on many of the toxic loans now bringing banks down. Sterling will withstand it for the time being. The massive deflationary pressure in the economy requires it.

Please Alastair, do it now.