Bank of England cuts interest rates

The Bank of England has cut interest rates to 0.25 per cent in a bid to prevent a post-Brexit recession.

In addition, the Bank has introduced a £100bn scheme to ensure banks pass on the benefits of the low rates to both households and businesses, as well as boosting quantitive easing by purchasing £60bn of UK government bonds and £10bn of corporate bonds.

“The Bank’s expectation that the UK’s growth potential could be negatively affected by Brexit in the medium-term makes it all the more important for the government to take swift, decisive action to unlock key infrastructure investment and show that the UK is open for business.

"Headline inflation in the short term will no doubt rise as a result of the weak pound. However, high import price inflation will have a negative impact on household spending, so is not the sort of inflation that will require a tightening of policy.

“At some point, the weak pound will boost both exports as well as companies that compete with imports, but this is some way off. Investors should be not put off by what will likely be a period of weaker growth, but focus on the improved competitiveness of many British companies as a result of the lower pound.”