** Breaking News – Bank of England cut interest rates ** (Dayle Littlejohn)

As we expected the Bank of England have cut interest rates today from 0.5% to 0.25%. The Bank of England decided more action needed to be taken therefore they will be purchasing £10bn of corporate bonds and £60bn of government debt. The way the Bank of England will do this is by printing money which is also known as quantitative easing. Furthermore the Bank will also be initiating a £100bn Term funding scheme which will provide the high streets banks the power to lend at lower interest rates to businesses and households. The Governor has stated high street banks will be punished if they fail to do this.

It seems like the Bank of England are not confident about the future of the UK economy. They have cut growth forecasts, implied the economy will be 2.5% smaller in 3 years, indicated unemployment and inflation will rise (something the BoE will be wary of), income growth will slow and house prices will fall. All in all an overall bleak picture to the future of the UK.

Personally I don’t believe its not all doom and gloom. The quantitative easing program is an aggressive move by the bank and it just shows how much the Monetary Policy Committee believe the ‘Brexit’ vote is going to weigh down on the UK however if the Bank hadn’t stepped in I believe the economy would have become completely stagnant and therefore a recession would have been just around the corner. I believe the aggressive move is a good one.

However in the short term, the Governor Mark Carney has stated a further cut could occur if the Monetary Policy Committee believe it will help, therefore potential further falls could be on the horizon.

The currency company I work for enables me to save private clients and businesses money when buying and selling pounds. If you are buying or selling pounds this year feel free to send me the currency pair you are trading (GBPUSD, GBPEUR, GBPCHF etc) the reason for your trade (company invoice, buying a property) and I will email you with my forecast for the currency pair [email protected]. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.