Central Bank of England exchange rates
Here’s the top of the story just filed by Emily Cadman and Gemma Tetlow, who’ve been in the BoE’s lock-in.
The Bank of England has slashed its growth forecasts and launched a huge new stimulus package as it attempts to mitigate the damage it judges the Brexit vote has inflicted on the UK economy.
Interest rates have been cut immediately to a new record low of 0.25 per cent, with the rate setting committee signalling there are more cuts in the pipeline.
To offset the hit to banks’ margins from the cut, the BoE has established a new Term Funding Scheme for banks that would provide up to £100bn from central reserves.
Lent at close to base rate – providing certain lending requirements are met – the scheme is an attempt to ensure the interest rate cut is fully passed on to both households and businesses.
The central bank also launched a new £70bn bond buying programme, which will incorporate both government and corporate bonds.
Over the next six months it will buy £60bn of government bonds, financed by the central bank’s reserves, taking the total stock of assets to £435bn.
It will also purchase £10bn of sterling denominated investment-grade corporate bonds, but only from firms that make a “material contribution” to the UK economy.