Do interest rate cuts work?

The MPC duly announced the much anticipated cut in base interest rates, though the 0.25% cut was much less than recent cuts by the US Federal Reserve. There is a good piece by Geoff Riley on the tutor2u website explaining the transmission mechanism of monetary policy, in particular the effects of interest rate changes. In addition, the comments in response to the article are worth reading.

http://www.tutor2u.net/blog/index.php/economics/comments/interest-rate-cuts-do-work/#extended