BoE to slash interest rates by the end of next week
Duncan Richardson, News Editor
5 Jul 2016, 12:47 p.m.
City experts are expecting the Bank of England to slash interest rates within weeks as the UK economy grids to a halt. Many will blame Brexit, however, economic data indicates that the British economy was stalling in the weeks leading up to the referendum.
Economists believe that Mark Carney will be forced to cut rates to 0.25% in an attempt to maintain confidence the UK economy. In the immediate aftermath of Brexit Carney and Chancellor Osborne both hinted that they would be prepared to reduce interest rates and reintroduce quantitative easing. The pound fell to a new 31-year low against the U.S dollar on the back of this news.
Construction data released yesterday indicates that the sector is experiencing a contraction similar to the one witnessed in 2009. Standard Life reacted to the news by suspending trading in its UK property fund, blaming the decision on the UK’s decision to leave the European Union. The last time Standard Life stopped customers making withdrawals was during the height of the 2008 meltdown.