Daniel Mahoney responds to the Bank of England’s announcement:
“The Bank’s further loosening of monetary policy could prove problematic for the UK economy. The falling pound means that inflationary pressures are already building up, and today’s decision will exacerbate them.
Costs of servicing the government’s debts have recently fallen to record lows, with five year bonds being sold at just 0.38%. However, it would make little sense for investors to hold onto 0.38% yielding debt in a 3% inflation environment, which may now be reality in the near future. Investor flight, large increases in the cost of government borrowing along with major losses for pension funds are very real possibilities. This is in addition to the longer term problems of asset price inflation and increasing consumer debt.
These are risks that will need to be carefully monitored over the coming months and years.”
Read more: Apocalypse Soon? The danger of Further Loosening Monetary Policy
Media Impact:
- BBC News: UK interest rates cut to 0.25%
- Wall Street Journal: BOE Policy Worsens Pension Funds’ Headache
- China Daily: Bank of England cuts rates, ready for ‘whatever action necessary’ after Brexit vote
- MarketWatch: BOE rate cut to widen pension fund shortfalls
- NewsMax: Bank of England Cuts Rates for First Time Since 2009, Restarts Bond Purchases
- Yahoo! Finance: Bank of England wields stimulus ‘sledgehammer’ to beat Brexit blues
- Business Standard: BoE cuts rates first time since 2009
- ActionForex: Bank Of England Cuts Interest Rates For First Time Since 2009
- Financial Express: Bank of England cuts rates, ready for “whatever action necessary” after Brexit vote
- Times of Malta: Bank of England cuts rates, seeks stability
- Investment Guru India: Expert Views: Bank of England cuts rates, restarts QE
- Caribbean Broadcasting Corporation: UK interest rates cut to 0.25%
- Metro US: Bank of England wields stimulus ‘sledgehammer’ to beat Brexit blues
- NetIndia: Bank of England cuts rates for first time since 2009, restarts bond purchases
- Yahoo! Singapore News: Bank of England wields stimulus ‘sledgehammer’ to beat Brexit blues
- Channel News Asia: Bank of England wields stimulus ‘sledgehammer’ to beat Brexit blues
- Business News Network: Bank of England cuts rates, wields stimulus ‘sledgehammer’ to soften Brexit shock
Date Added: Thursday 4th August 2016
