![Bank of England cuts rate to record low, unveils fresh stimulus](https://photo-cdn.urdupoint.com/media/2016/08/_2/740x404/pic_1470320497.jpg)
Bank Of England Cuts Rate To Record Low, Unveils Fresh Stimulus
Faizan Hashmi Published August 04, 2016 | 07:21 PM
![Bank of England cuts rate to record low, unveils fresh stimulus](https://photo-cdn.urdupoint.com/media/2016/08/_2/740x404/pic_1470320497.jpg)
LONDON, (APP - UrduPoint / Pakistan Point News - 4th August, 2016) - The Bank of England on Thursday cut interest rates to a record low 0.25 percent in a vast stimulus package aimed at preventing recession after Brexit.
Policymakers voted unanimously to reduce its key rate by a quarter-point from 0.50 percent, cutting borrowing costs for the first time in more than seven years, the bank said in a statement after its latest meeting. The BoE also backed a œ170-billion ($227-billion, 200-billion-euro) stimulus package after slashing its economic forecasts for 2017 and 2018, in the wake of Britain's shock EU exit referendum.
The bank's nine-member Monetary Policy Committee (MPC) also agreed to re-activate its quantitative easing (QE) bond-buying scheme, lifting it by œ60 billion to a total of œ435 billion in the first QE increase since 2012.
"At its meeting ... the MPC voted for a package of measures designed to provide additional support to growth and to achieve a sustainable return of inflation to the (2.0-percent) target," the bank said in minutes from the gathering. The package will see the BoE buy #10 billion of corporate debt, while it also unveiled a new scheme worth up to #100 billion to encourage banks to lend to households and businesses, taking the total stimulus amount to œ170 billion.
Thursday's news sent London's FTSE 100 index almost 1.50 percent higher in early afternoon deals, while sterling bounced briefly against the euro and Dollar before sliding lower. "Recent surveys of business activity, confidence and optimism suggest that the United Kingdom is likely to see little growth in GDP in the second half of this year," the bank warned. The BoE meanwhile maintained its 2.0-percent economic growth forecast for 2016. However, it also slashed the growth outlook to 0.8 percent in 2017 and 1.8 percent in 2018.
That compared with prior predictions of 2.3 percent for both 2017 and 2018. "Following the United Kingdom's vote to leave the European Union, the exchange rate has fallen and the outlook for growth in the short to medium term has weakened markedly," it added. The BoE had already flagged last month that it might deliver an interest rate cut in August in response to the Brexit referendum.
British borrowing costs now stand at their lowest level in the central bank's 322-year history.
Related Topics
Recent Stories
![Cricket: England v West Indies 3rd Test scoreboard](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019914.jpg)
Cricket: England v West Indies 3rd Test scoreboard
![Finance minister briefs Chinese officials on refor ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019922.jpg)
Finance minister briefs Chinese officials on reform agenda, engagement with IMF
![Finland says Russian vessel violated its territori ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019912.jpg)
Finland says Russian vessel violated its territorial waters
![Olympic opening ceremony under way on River Seine](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019266.jpg)
Olympic opening ceremony under way on River Seine
![West Indies' treble strike rocks England in third ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019264.jpg)
West Indies' treble strike rocks England in third Test
![Ukraine court orders detention of suspect in murde ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019262.jpg)
Ukraine court orders detention of suspect in murder of nationalist ex-MP
![Long queues, ticketing problems ahead of Paris ope ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019015.jpg)
Long queues, ticketing problems ahead of Paris opening ceremony
![Rana Sanaullah Khan joins Paris 2024 Olympics inau ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019638.jpg)
Rana Sanaullah Khan joins Paris 2024 Olympics inauguration reception
![Glowing tributes mark 69th birthday of President Z ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019637.jpg)
Glowing tributes mark 69th birthday of President Zardari at Governor's House
![Players unaware of spying scandal as Canada Olympi ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019635.jpg)
Players unaware of spying scandal as Canada Olympic coach sent home: official
![Naqvi hails Pak women cricketers for going down fi ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019013.jpg)
Naqvi hails Pak women cricketers for going down fighting against SL
!['Sabotage' on French rail network before Olympics: ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019634.jpg)
'Sabotage' on French rail network before Olympics: What we know
More Stories From World
-
Biden talks Gaza ceasefire efforts with king of Jordan
4 hours ago -
Sinaloa Cartel co-founder pleads not guilty after stunning US capture
4 hours ago -
Panama says Venezuela blocked ex-presidents going to observe polls
4 hours ago -
Ethiopia mourns victims of landslide tragedy
5 hours ago -
Khan Yunis fighting displaces 180,000 Gazans in four days: UN
5 hours ago -
Trump slams rivals as he meets Netanyahu in Florida
5 hours ago
-
Obama & his wife, Michelle, officially endorse US VP Kamala Harris for president
5 hours ago -
Rain, cooling slow huge blaze in Canada's Jasper park
5 hours ago -
Airbus and Boeing supremacy secure despite turbulence
5 hours ago -
S.African police detain 95 Libyans at suspected military camp
5 hours ago -
'Slapping therapist' guilty over UK diabetic woman's death
6 hours ago -
Panama says Venezuela blocked flight of ex-presidents going to observe polls
6 hours ago