Bank of England likely to Cut Interest Rates and Continue Bond-buying Program

Brexit crisis is not yet over, The Bank of England said on Thursday it was still likely to cut interest rates to just above zero later this year, even though the initial Brexit hit to Britain's economy was proving less severe than it expected only last month. Bank of England is so brave to do the decision

The Bank of England nine rate-setters voted unanimously to keep Bank Rate at its new record low of 0.25 percent, the lowest level in the BoE's 322-year history. reported by Reuters, Bank of England also voted 9-0 to keep the Bank's bond-buying program target at 435 billion pounds and to continue with its new plan to buy up to 10 billion pounds' worth of corporate bonds.

Last month the Bank of England decided to help the economy cope with the shock of the decision to leave the European Union with a stimulus package on a scale not seen since the depths of the global financial crisis.

But since August, a string of indicators has shown a bounceback from the initial impact of the vote, leading some lawmakers to criticize BoE Governor Mark Carney for being alarmist about the risks of a Brexit vote.

The central bank said the economy was still on course to slow sharply.

"A number of indicators of near-term economic activity have been somewhat stronger than expected," the Bank said in minutes of the Monetary Policy Committee's September meeting. "The Committee now expect less of a slowing in UK GDP growth in the second half of 2016."

Source :Reuters