Greenspan cuts key interest rate to 1%

THE United States Federal Reserve last night cut a key short-term interest rate by a one-quarter percentage point to its lowest level in 45 years.

The aim is to energise consumer spending and business investment and help the US economy snap into action.

Fed chairman Alan Greenspan and his Federal Open Market Committee colleagues reduced the federal funds rate from 1.25% to 1%, the lowest level since 1958.