‘Stimulus now’: Bank of England cuts interest rate down to 0.25pc

As expected, the Bank of England has cut base interest rates down to 0.25 per cent- the first movement since rates were cut to an ’emergency’ low of 0.5 per cent in March 2009. There’s a “clear case for stimulus, and stimulus now” said Mark Carney, BoE governor – so the money printing machine is being put back into action. About £60 billion is to be created electronically, and used to lend money to the government via gilt purchases. It will save Theresa May’s government a fortune: the rate of interest charged on the many loans it takes (ie, gilt yields) collapsed to 0.63pc today; almost half the rate they were a month ago. The bank’s prediction now is that Britain will avoid recession after the Brexit vote (contrary to what George Osborne was suggesting) but with growth halved to 0.8 per cent in 2017 but getting back to where it would othwise have been in 2019.