Bank of England Cuts Rates to Historic Lows
March 5, 2009
The Bank of England (BoE) today discounted rates by 50bps resulting in the base rate standing at record lows. The decision was in line expectations and therefore garnered very little market interest. However, the news that a GBP75bn asset buying program had been initiated intrigued the market as the BoE have now adopted a quantitative easing stance. On the back of this news Sterling tumbled versus the US Dollar as the market largely focused on the deterioration of the UK economy and the skepticism on the effectiveness of the stimulus initiative.