The Bank of England has cut interest rates by half a point to another record low and begun the process of pumping tens of billions of pounds of newly created money into Britain’s troubled economy.
From the Guardian:
At noon today, the Bank announced that rates are being lowered again to 0.5%, the lowest since the central bank was founded in 1694. Today’s cut is the sixth time that UK borrowing costs have fallen since October, when rates were still 5%, and is another blow for savers.
With its rate-cutting ammunition all but exhausted, the Bank of England pressed the button on a much more drastic policy, quantitative easing – also known as printing money – in an effort to kick-start the economy.
It will create £75bn and use it to buy government bonds (gilts) and corporate debt over the next three months to boost the flow of money in the economy. The Bank has been given permission by Alistair Darling to spend a total of £150bn on asset purchases. The £75bn figure includes £50bn previously allocated to the Bank for asset purchases to restart credit markets.
To read the full article, visit guardian.co.uk