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Bank of England cuts interest rates to 0.25%

Staff Writer | August 4, 2016
The Bank of England cut interest rates by 25 basis points to 0.25%, in a move widely expected by economists.
Bank of England
Britain   The economy is set to stagnate
The BoE's Monetary Policy Committee voted unanimously to lower interest rates for the first time since 2009, which follows a raft of weak economic data and the UK's vote to leave the European Union.

The Bank voted 6-3 on raising the asset purchase programme by 60bn pounds to 435bn pounds. The BoE launched a scheme to buy 10bn pounds of high-grade corporate bonds in the next 18 months.

A so-called Term Funding Scheme, potentially worth 100bn pounds, was also introduced to encourage banks to keep lending after cutting interest rates.

The central bank said it expected the economy to stagnate for the rest of 2016 and experience weak growth through 2017. The Bank left its forecast for growth this year at 2% but lowered its estimate for 2017 growth to 0.8% from a previous projection of 2.3%.