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BoE cuts interest rate to 0.25%, £60bn of extra QE Watch

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    (Original post by Trapz99)
    The Bank of England is the 55th central bank to ease interest rates this year.
    Does that include Zimbabwe?
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    -£60bn in extra QE
    -£10bn in extra high quality corporate bond purchases
    -Up to £100bn towards Long Term Funding scheme for banks
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    Mark Carney is currently speaking, says the Bank of England can't fully offset the structural shock caused by Brexit with its new monetary package.
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    (Original post by Fullofsurprises)
    Does that include Zimbabwe?
    No.

    I got the statistic from here:
    https://www.dailyfx.com/forex/video/...-Decision.html
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    (Original post by Trapz99)
    No.

    I got the statistic from here:
    https://www.dailyfx.com/forex/video/...-Decision.html
    It's interesting that the £ is falling again now as a result. I presume this was factored in by the MPC but it shows that the markets continue to think the GB economy is in trouble.
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    (Original post by Fullofsurprises)
    It's interesting that the £ is falling again now as a result. I presume this was factored in by the MPC but it shows that the markets continue to think the GB economy is in trouble.
    Yeah that's true, my guess is that the news today that the BoE has cut 2017 growth from 2.3% to 0.8% has led to this fall in the pound.
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    Terrible news as I have about a million pounds in svings
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    BoE scared of recession much?
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    (Original post by Fullofsurprises)
    It's interesting that the £ is falling again now as a result. I presume this was factored in by the MPC but it shows that the markets continue to think the GB economy is in trouble.
    Not really interesting. It is the expected responce to an interest rate drop.

    Sensible decision, QE seems a good move considering inflation is so low anyway. Better to be overresponsive than under.
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    (Original post by Trapz99)
    Economists' expectations for interest rate announcement (source: Bloomberg):
    90.4% think it will be 0.25
    3.8% think it will stay at 0.5
    3.8% think it will be 0.10
    2% think it will be cut to 0
    Similar figures were released last month. I find the most intriguing thing is Carney basically saying to Sky "we had no real data to base our decision off, we just did it on the off chance something goes wrong later on," is that really the sort of attitude the governor of the BoE should be taking?
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    (Original post by Fullofsurprises)
    Sure, they are all based on "Base Rate + such-and-such a percentage" - I was amusing myself thinking of a situation where the base rate hits -2% and we get products 'charging' a rate of -0.5% on the mortgage. Of course, in the real world, they will find a way round it. :sad:

    Note that the B of E has not ruled out further cuts in rates this morning.
    There is a difference between the rates offered for banks to HOLD your money on deposit and LEND you money for a mortgage. So while your savings account might 'earn' a -% your mortgage rate will be most certainly be a +%.

    I have an offset mortgage so if the interest rate on my savings drops below the mortgage rate I will simply stick it in the savings account linked to the mortgage.
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    (Original post by viffer)
    There is a difference between the rates offered for banks to HOLD your money on deposit and LEND you money for a mortgage. So while your savings account might 'earn' a -% your mortgage rate will be most certainly be a +%.

    I have an offset mortgage so if the interest rate on my savings drops below the mortgage rate I will simply stick it in the savings account linked to the mortgage.
    Of course there is, but theoretically if the SVR offered is, say, "base rate +0.5%" then that should become negative once base rate goes below -0.5%.

    I realise (as I said) that in the real world, mortgage lenders have customers sign contracts that prevent that kind of thing, or at least, leave the lenders sufficiently in charge to issue some gobbledegook explaining why they can't pass on the latest reduction (which some are not today) but that didn't prevent my moment of whimsical longing.
 
 
 
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