TWO things have happened as forecast over the last week or so. Firstly, the Monetary Policy Committee of the Bank of England unanimously cut the bank rate from 0.5 per cent to 0.25 per cent in order to try to help the economy and secondly the value of the pound immediately took a knock.
In addition, it has decided that it will buy back £60 billion (€72 billion) of UK government bonds and £10 billion (€12 billion) of corporate bonds in order to help stimulate the economy. Growth forecasts have been reduced whilst it is expected that unemployment will increase slightly in the coming year.
It doesn’t look as if there is likely to be a recession (which according to the Bank of England is in part due to its current actions) but the next few months could be difficult for the economy although not catastrophic.