6 Aug

Bank of England cut Base Rate to all time record low from 0.5% to 0.25%

The Bank of England has announced its first rate cut since March 2009 bringing the rate to all all time record low since the bank was founded in 1694 from 0.5% to 0.25%.

The Monetary Policy Summary published on 4th August 2016 started with:

“The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment.  At its meeting ending 3 August 2016, 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 target.  This package comprises:  a 25 basis point cut in Bank Rate to 0.25%; a new Term Funding Scheme to reinforce the pass-through of the cut in Bank Rate; the purchase of up to £10 billion of UK corporate bonds; and an expansion of the asset purchase scheme for UK government bonds of £60 billion, taking the total stock of these asset purchases to £435 billion.  The last three elements will be financed by the issuance of central bank reserves...

The full Monetary Policy Summary and minutes of the Monetary Policy Committee meeting ending on 3 August 2016 can be found at the website of the Bank of England.

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