Finance New record low interest rate in UK
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New record low interest rate in UK

Governor of the Bank of England, Mark Carney Photo: Getty
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The Bank of England has cut benchmark interest rates to a new record low of 0.25 percent, the lowest in the bank’s 322-year history.

It has also introduced a range of other measures to bolster Britain’s economy, over concern that the Brexit decision could weigh on growth.

The bank has warned lenders they must pass on cheaper borrowing costs to customers.

The move – the first cut in seven years – has already angered savers who have been getting low returns for years thanks to rock-bottom interest rates.

There is widespread uncertainty about the longer term impact of the country’s decision to leave the European Union. It is unclear what Britain’s future trading relationship will be with the bloc, or what effect the move will have on the financial services industry.

The referendum also unleashed a summer of political turmoil that led to a new government and to questions about the new leadership’s economic policies.

In the weeks since the vote, the pound has fallen sharply, and stocks in a number of sectors, including banking and construction, have been under pressure.

Several real estate funds suspended withdrawals as investors tried to pull out their cash, fearing a slowdown in the British property market.

Consumer confidence, services output and purchasing-manager sentiment has plummeted.

The International Monetary Fund has cut its growth forecast for Britain’s economy, which had been one of the region’s strongest since the financial crisis.

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