Other actions introduced include the unveiling of a radical package of measures worth up to £170billion to help stimulate the economy. Crucially, the Bank of England forecasts Britain will narrowly miss falling into a recession along with a cut in its growth forecasts for the economy, predicting GDP growth of 0.8 per cent for next year.
The Bank announced it is increasing its quantitative easing programme by printing £60billion more money to take the total to £435 billion since the banking crisis. Significantly, it also unveiled a radical £100 billion funding scheme for banks and a £10 billion corporate bond-buying scheme; decisions that the Monetary Policy Committee was divided on. As part of the statement released, there is a forecast that unemployment will rise.
The new 0.25 per cent base interest rate spells good news for mortgage holders and other borrowers, but will heap further misery on savers, who have suffered from the long-term low rates. The previous interest rate level of 0.5 per cent had remained since March 2009. The new lower rate could also hit sterling, with experts warning of a further devaluation which would mean higher costs for British holidaymakers and expats living in the Eurozone who are paid in sterling.
Today’s cut in interest rates is the latest hit to savers, who have suffered more than 1,000 rate cuts during 2016 alone, it has been reported. That equates to around nine savings rates being chopped for every rate that has increased since the start of 2016.
If you have savings lying stagnant in the UK it is surely worth an hour of your time to speak to a reputable financial adviser.