In 1695 the Bank of England cut rates to 3%, it wasn’t until 1844 they went lower – at 2.5% – bottoming out at 2% in 1852.
Neither world wars nor the Great Depression saw rates drop lower than 2% until 2009 – when the global banking crisis saw the MPC act and slash rates to a new all-time low of 0.5%.
For the past seven-and-a-half years that’s exactly where they’ve stayed – until, perhaps, now.
Now Brexit has done what seven years of austerity, recession and European debt crises couldn’t and see the Bank cut again to a new 300-year low of 0.25%.
“Following the United Kingdom’s vote to leave the European Union, the exchange rate has fallen and the outlook for growth in the short to medium term has weakened markedly,” the Bank explained.
“All members of the Committee agreed that policy stimulus was warranted at this time.”
As well as cutting rates, the Bank of England voted to bring in a new Term Funding Scheme; buy up to £10 billion of UK corporate bonds; and expand the asset purchase scheme for UK government bonds (quantitative easing) by £60billion, taking the total stock of these asset purchases to an astonishing £435 billion.
