The Governor of the Bank of England Mark Carney has announced a drop in the base UK interest rate to a new record low of 0.25 percent from 0.5 percent.
In an effort to protect the British economy from the negative effects of Brtain’s referendum vote to leave the European Union, Carney announced the first drop in interest rates since March 2009.
The Bank’s economists also slashed UK growth forecasts and boosted quantitative easing by 60 billion pounds (70 billion euros) by buying government debt over the next six months.
Quantitative easing is money printing to put cash into the economy and stimulate it.
It addition it will purchase corporate bonds and launch measures to ensure banks keep lending to businesses and individuals, even after the cut in interest rates.
The bank said it expects the UK economy to stagnate for the rest of this year and suffer weak growth throughout next year.
Carney said the UK’s central bank will do “whatever it takes” and that the effects of the lower interest rates will be felt immediately in the economy.
Shares on the London Stock Exchange rose and the pound fell 1.5 percent against the US dollar.