The bank has cut it's interest rate to 0.25%. It's the first cut in 7 years and the lowest rate in bank's history. (I think the last bit is true anyway, I'm sure I saw a reference to it, but I'm having trouble finding the source again)
What will it mean to you?
- If you've got savings you're going to be worse off by £25 per £10k every year.
- If you've got a mortgage you're going to be better off by £22 a month for a typical one. This assumes your lender passes the saving on of course.
They're also going to be pumping £160bn pounds into the economy in various schemes to try and stimulate the economy. Not surprisingly it's slowed down and it seems very likely that it'll go into recession fairly soon. The Bank of England would like to prevent or mitigate this. (Recession is defined as two consecutive quarters of negative growth in the economy.)
Pumping money into the economy in these circumstances is termed ”Quantitative easing“. What is quantitative easing? It's a mechanism to try and stimulate growth in the economy. I can't help thinking that £160bn would be roughly £2,500 for every man, woman and child in the country. I don't now about you, but I could do a lot of easing with £2,500 :-)
Source - BBC News: UK interest rates cut to 0.25%
Source - BBC News: What is quantitative easing?