As was widely predicted, the Bank of England yesterday cut interest rates from 0.5 per cent to 0.25 per cent, a record low and the first cut in seven years.
The Bank of England has also signalled that rates could go lower if the economy worsens, meaning that savers and pensioners will be even worse off than they are now.
The Bank also announced additional measures to stimulate the UK economy, including a £100 billion scheme to force banks to pass on the low interest rate to households and businesses. It will also buy £60 billion of UK government bonds and £10 billion of corporate bonds. RBS Royal Bank of Scotland is yet to decide whether to pass on the Bank of England’s cut in interest rates to its borrowers in a move that risks a row with its governor, Mark Carney, The Guardian reports.
As the 73 per cent taxpayer-owned bank slumped to a £2 billion half-year loss, the bank admitted it was still reviewing the implications of the historic rate cut to 0.25
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