Baja Real Estate & Economy News

  LONDON, England (CNN) -- Europe's financial markets suffered more heavy losses Wednesday despite the world's leading economies slashing interest rates to tackle the global financial crisis.

Sharemarkets in Britain, France and Germany closed well down despite the coordinated rate cuts led by the United States.

Wall Street, where good news is needed after a 500-point drop a day earlier, opened nervously, see-sawing in and out of positive territory before settling in the red.

The U.S. Federal Reserve cut its main rate by a half percentage point, with the central banks of China, Britain, Sweden, Switzerland and the European Central Bank all following suit with their own cuts.

The Fed reduced its key rate from 2 percent to 1.5 percent. In Europe, the Bank of England cut its rate by half a point to 4.5 percent, while the European Central Bank dropped its rate to 3.75 percent.

"The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability," the Fed said.

Soon after the cuts the International Monetary Fund (IMF) warned the world was "entering a major downturn" and that "many advanced economies are close to or moving into recession."

 The IMF's World Economic Outlook, released Wednesday, called recent blows to the global economy "the most dangerous financial shock in mature financial markets since the 1930s."

Global growth was projected to slow substantially in 2008, and a modest recovery would only begin later in 2009, it said.

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