Reuters: US Dollar Report: BoE's King says interest rate cut could be counterproductive

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BoE's King says interest rate cut could be counterproductive Aug 8th 2012, 10:23 LONDON | Wed Aug 8, 2012 6:23am EDT LONDON Aug 8 (Reuters) - Bank of England Governor Mervyn King threw cold water on Wednesday on the idea of another interest rate cut, saying such a move could hurt some banks and not have a positive effect. But he said that was not the case with quantatitive easing, or QE, the buying of assets by the central bank. "It (cutting interest rates) would damage some financial institutions and would therefore be counter-productive, which is precisely why we haven't done it," he told a news conference. King added: "I don't accept the premise of the question that (QE) asset purchases are having a diminishing effect, I don't believe that ... (T)hey create money in the economy and that can have an effect."

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