The Bank of England (B o E) slashed interest rates for the first time since the financial crisis, as recession looms over Britain’s economy following the country’s decision to quit the European Union.
The bank of England’s (B o E) monetary police committee on Thursday announced it would halve the base rate to 0.25 percent – the lowest it has ever been in the lender’s 322-year history.
The decision came after the Brexit vote had sparked concerns about the country’s financial stability.
New business surveys gave a gloomy outlook, indicating the British economy would contract by around 0.4 percent over the third quarter of this year.
The pound has also tumbled against the dollar and the euro ever since the referendum’s outcome became clear.
The rate cut is now supposed to fight these trends.
As credits become cheaper, it is hoped that consumers and businesses will spend more and eventually boost the economy.
Also, the Bank of England (B o E) announced it would pump another £60 billion (71 billion euros, $79 billion) into the economy by buying up state bonds in a process dubbed quantitative easing.