European Central Bankers Follow Bernanke's Path
The moves from the ECB and the Bank of England was expected, but the Riksbank's cut was much more radical than I and virtually all other analysts had expected (most of us had expected 100 or 125). The Riksbank's monetary policy has done a 180 degree turn as they actually raised rates to 4.75% as late as September this year. It appears that the Riksbank board is in a full panic mode about the Swedish recession. As a result, the Swedish krona fell to a new all time low against the euro, so that a euro now costs SEK 10.61. The pound also fell to a all time low against the euro, at roughly €1.15/£ (Or £0.87/€ in inverted terms)
Despite the aggressive character of these cuts, they will likely not make much difference in the short-term, just like Bernanke's aggressive cuts didn't make much difference. The downturn will continue and price inflation will likely undershoot the targets in the short-term (particularly in the euro area). Once oil stabilizes, we will however see an upside risk to inflation, particularly in the U.K. and Sweden. And central banks will likely not dare to be as aggressive in raising rates as they have now been in cutting them.