The Bank of England has today announced the first interest rate cut in over seven years, as the Monetary Policy Committee (MPC) decision led to the unveiling of a package of measures with the aim of preventing another recession following the recent Brexit vote.

There was a unanimous decision from the committee to cut rates a quarter per cent to a record low in the Bank’s 300 year history, 0.25pc from the previous record low of 0.5pc.

Announcing a 170bn package of additional measures designed to boost the economy, the Bank said it would also be expanding quantitative easing by 60bn over the coming 6 months. The Bank will be buying up to 10bn of high quality corporate debt, commencing September 2016, which will reduce corporate funding costs.

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The current Bank Rate of 0.5pc has been sustained since March 2009, but Mr Carney, the Bank Governor, said that a “markedly” weaker growth outlook meant that a cut further towards zero was needed, but he has ruled out going negative.

A “Term Funding Scheme” designed to offset the impact of cutting interest rates on bank profits will allow commercial banks to borrow a proportion of their outstanding lending to UK businesses and households, and measures have been taken by the Bank to ensure that banks pass on the lower rates to firms and consumers.

UK growth forecasts were slashed by the biggest margin since the Bank started publishing quarterly economic forecasts in 1993, but the Governor said he did not think there would be a Brexit-induced recession.

UK growth is now forecast to flat-line for the rest of this year, and is forecast to grow by just 0.8pc in 2017, down from its previous forecast of 2.3pc.

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