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By Tom Rivers
30 October 2008
European shares extend their rally into a third day Thursday. For VOA, Tom Rivers in London has details.
Encouraged by the U.S. Federal Reserve half a percentage point interest rate cut, European markets, as in Asia, have picked up some lost ground amid hopes of a round of cuts soon.
In Britain, the Bank of England is expected to cut rates in the next few days. While the Bank's decision is independent from the government, Treasury Secretary Alastair Darling hinted Thursday that the central bank will likely opt for a cut now to counter growing recessionary pressures.
|Double-decker bus advertising chocolate drives past The Bank of England in central London, 08 Oct 2008|
"The Bank of England's remit is sufficiently wide to allow it firstly to target inflation. And I think inflation is coming back down now, or will come back down now, but also to help the government in its wider objectives of supporting the economy," said Darling.
Recession worries here, as in the rest of Europe, center on mortgage difficulties, rising unemployment and the difficulties small businesses face. Darling says the government is freeing up four billion pounds, or around $6.5 billion, specifically for banks to loan to those small companies feeling the squeeze right now.
"I want to make sure that we do everything we possibly can to help them. And today's step of making that extra four billion pounds available I believe will be a significant step forward and I want the banks to get on with doing the job that they do and that is making sure that where you have got perfectly good prospects, that you help those businesses. They need that help," he said.
Elsewhere on the European markets Thursday, strong third quarter results by Deutsche Bank, Germany's largest bank, boosted the Dax index. Commerzbank and UBS were also up.
Royal Dutch Shell fell two percent, despite recording a quarterly net profit increase of just over 70 percent.
Among others reporting results, consumer giant Unilever was up two percent after posting a rise in third quarter sales.
While the mood is more upbeat Thursday, analysts stress that the European economy remains in a slump and that inevitably means there will be more bad days ahead.