UK interest rates cut to 0.25%

The Bank of England have cut UK interest rates from 0.5% to a record low of just 0.25%.

This is the first cut by the Bank of England since 2009 as it also announced the biggest cuts to its growth forecast: growth predictions for 2017 have been revised, from the 2.3% announced in May to 0.8% post Brexit.

The forecast for 2016 growth has been left unchanged at 2% as a result of stronger-than-expected growth in the first half.

The forecast for 2018 has been cut from 2.3% to 1.8%.

Pre the EU referendum, Mark Carney had indicated that a host of measures may be needed to stimulate the UK economy should the country vote to leave the European Union.

Included in the schemes announced today are a new a new Term Funding Scheme.

Funds will be made available to banks at or around the new base rate of 0.25% to encourage the banks to keep lending. It is predicted that as much as £100bn could be made available to lend over a four-year period

This morning the GBP fell by 1% against the dollar.

A £60bn increase in quantitative easing to £435bn was by the Monetary Policy Committee.

Despite many believing that a vote to leave the EU could result in a recession, The Bank of England’s quarterly inflation report does not foresee this.

Read an in-depth report on today’s announcement from The Bank of England