Bank Of England Cuts Rate To Record Low, Unveils Fresh Stimulus
Faizan Hashmi Published August 04, 2016 | 07:21 PM
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
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 5 May 2024
Today Gold Rate in Pakistan 05 May 2024
Bugti assures transporters for addressing their problems
Deputy Prime Minister and Foreign Minister, Mohammad Ishaq Dar meets foreign min ..
3 drug peddlers arrested, hashish recovered
1496,990 children given polio drops in five days: DC
Six terrorists killed, hideout busted in N Waziristan IBO: ISPR
Pakistan, Qatar agree to further expand trade, investment ties
Sindh cabinet approves Rs177.5m to strengthen, mobilize various wings of police
Faisal Karim Kundi takes oath as new KP Governor
Azad Jammu and Kashmir Prime Minister Anwaar ul Haq Chaudhry seeks more vibrant ..
Tahaffuz Manzil Foster Home providing care & support to homeless children
More Stories From World
-
Pakistan's Shahzad Baig named among TIME's 2024 list of 100 most influential people in healthcare
6 minutes ago -
'Revolution' in air as actor stumps for Hungary opposition
26 minutes ago -
Madonna wows Rio with 'Celebration Tour' finale
36 minutes ago -
Investigators say bodies in Mexico likely those of missing surfers
2 hours ago -
Hope and disillusionment among Chad's first-time voters
2 hours ago -
Panama to vote in presidential election with eight contenders
2 hours ago
-
Edwards hits 43 to spark T-Wolves over Denver in NBA playoffs
2 hours ago -
Five assists and goal for Messi, hat-trick for Suarez as Miami hit six
2 hours ago -
'Radicalised' 16-year-old shot dead by police in Australia
2 hours ago -
Undisputed champion 'Canelo' Alvarez hands Munguia first defeat
2 hours ago -
Floods in southern Brazil kill 57, force 70,000 from homes
2 hours ago -
Lyles, Jacobs help USA, Italy qualify for Paris Olympic relays
2 hours ago