British central bank cuts interest rate to record low | business

Thu, 04 Aug, 2016 06:10:41 PM

British central bank cuts interest rate to record low

FTimes- Xinhua Report, Aug 4

The Bank of England is pictured in central London on August 4, 2016, ahead of an expected interest rate reduction. The Bank of England is expected to slash interest rates to a record-low 0.25 percent later Thursday and could pump more stimulus into the economy as it battles the fallout from Britain's vote to leave the EU, economists say. The announcement, due Thursday after the British central bank's latest monetary policy meeting, would take rates to their lowest level in the BoE's 322-year history.Photo AFP-Lehtikuva

The Bank of England (BoE) Thursday cut its interest rate from 0.5 percent to a record low level of 0.25 percent, as Britain pushes for a stimulus to expand its economy after a historic vote to leave the European Union.

The move is the first cut in seven years since the rate hit its previous record low level of 0.5 percent in March 2009.

In a bid to provide additional monetary stimulus, the bank also decided to buy up to 10 billion pounds(13.15 billion U.S. dollars) of British corporate bonds and 60 billion pounds of government debt, according to a statement released by the bank.

The bank also cut its growth forecast for Britain to 0.8 percent in 2017 and announced its unemployment rate was expected to rise to 5.4 percent next year.

The bank has warned that there will be "little growth in GDP in the second half of the year" although the forecast for 2016 growth has been left unchanged at 2 percent as a result of stronger-than-expected growth in the first half.

Finland Times