World's central banks march towards zero rates

By Mike Peacock

LONDON (Reuters) - A slew of sharp interest rate cuts on Thursday showed the world's central banks have redoubled their willingness to ease policy as far as it takes in their ongoing battle with the worst financial crisis in 80 years.

Some were raising rates only months ago but have undergone a rapid conversion as the global financial crisis worsened.

The Bank of England cut rates by a full point on Thursday to follow last month's shock 1.5 point reduction. Sweden reduced rates by a stunning 1.75 points and even the European Central Bank's more modest 75 basis points cut was its largest ever.

"The substantial easing we've seen around the world this week does suggest there's been a sea change in attitude among policymakers," said Sarah Hewin, senior economist at Standard Chartered Bank in London.

The only difference in strategy appears to be one of speed.

"The ECB's cutting of interest rates by 75 basis points ... seems somewhat tame compared to the recent moves by a number of central banks," said Howard Archer at IHS Global Insight.

The Federal Reserve is expected to cut U.S. rates, which are already down at 1.0 percent, again later this month.

The Bank of Japan's rate target at 0.3 percent is just a whisker away from zero, the point at which it held official rates a decade ago as it battled deflation.