by Tho Bishop
The Bank of England today announced it will cut interest rates to .25%, a new historic low. This is the first interest rate cut since the BoE set rates to .5% in 2009, and a continuation of the global trend to push rates closer to 0% (and below.) The BoE also announced a new quantitative easing program that will buy £10 billion corporate bonds and expand its holdings of government debt by £60. While many expected the Bank of England to take action follow last June’s Brexit vote, the QE announcement surprised some bank watchers.
As ZeroHedge pointed out this morning, one reason for the new round of QE from the BoE is the increase in cash “hording” following Brexit. Pounds have been leaving the banking sector for the security of private holdings in record numbers, with Sky News reporting that: