Bank of England revived QE
The Bank of England changed its monetary policy on Thursday. The regulator cut its key rate for the first time in more than 7 years to a record low of 0.25%. The decision to lower borrowing costs was unanimous. Governor Carney pointed out at a press conference that the regulator can lower rate further of needed. The central bank also expanded its quantitative easing (QE) program: the BOE will buy 60 billion pounds of government bonds over 6 months and 10 billion pounds of corporate bonds in the next 18 months. This step was supported by 6 out of 9 Monetary Policy Committee (MPC) members.
The regulator underlined that Brexit creates uncertainty for British economy and monetary policy alone won’t be able to cope with it. According to the BOE. There will be little growth for British economy in the second part of the year, while lower pound will push inflation to 2% target already in the near term.
GBP/USD fell towards 1.3100 on the Bank of England’s announcement.