Will England Play Along?

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LONDON: England may not be getting in on the euro, but it can still get with the economic program. The countryís markets got a boost Tuesday from widespread expectations that on Thursday, the Bank of England will follow closely in the week-old footsteps of the 11 euro-zone countries and cut short-term interest rates by as much as half a point. Why? For the same reason the rest of Europe joined hands in the first place: Itís no fun being odd man out.

Europe is headed for an economic slowdown this spring -- thatís why the 11 euro-joining central banks made their last act a boldly coordinated interest rate cut that brought rates across the zone to 3 percent. England needs to follow suit or risk falling behind its trading partners -- high interest rates (in relation to its neighbors) would prop up the pound and slow down Englandís exports, spelling recession for sure. Englandís disdain for the euro pact means there will be a pound sterling next year. But if the Bank of England continues to follow the euro-zone bankersí lead on monetary policy, the pound note will be the only indication that Britain hasnít signed up.