Bank of England Governor Mervyn King, 12 Nov 2008

The head of the Bank of England says policy makers are prepared to cut interest rates further to bolster the battered economy. Mervyn King spoke after reports that British unemployment hit the highest point in years.

The British action could help boost spending by making it cheaper to borrow the money consumers need to buy homes and companies want to purchase equipment needed to expand businesses and hire new people.

The job market and the rest of the economy may fall further as many companies are reporting declining profits or growing losses during July, August, and September.

The disappointing earnings reports come from the largest U.S. electronics retailer, Best Buy, Macy's Department store, a major German utility company, and many other firms. Those profit reports drove U.S., European and Asian markets down in Wednesday's trading.

Meantime, Democratic leaders of the U.S. Congress are trying to boost the overall economy by pushing for a financial rescue of the U.S. auto industry, as car companies come dangerously close to bankruptcy.

Congressional leaders want lawmakers to amend the $700 billion government bailout package to allow automakers access to the funds slated for banks and financial service firms.

The "Big Three" auto companies, General Motors, Ford and Chrysler, have been hurt by tight credit conditions, which make it more difficult for consumers to get loans to buy cars. Sales were also hurt by the high price of oil earlier this year, which pushed up the price of gasoline.

But, oil prices have since declined to the lowest level in 20 months, falling below $58 a barrel during trading in New York.

U.S. President-elect Barack Obama and President George Bush discussed providing aid to General Motors, Chrysler and Ford when they met at the White House earlier this week.

Some information for this report was provided by AFP, AP and Reuters.