Thursday, August 4, 2016

After Brexit, Britain lowered the minimum interest rate – Clarín.com

With the eyes in the post Brexit economy and fear of a recession in the kingdom, the mighty Monetary Committee of the Bank of England reduced from 0.50 to 0.25 percent interest rate for the first time in seven and a half years. A further reduction is expected before year-end, when they go to launch negotiations by the departure of Britain from the European Union and the impact they may have on the economy and finances of the country, following the detonation of Article 50 is measured, initiating divorce with the mainland.

the Bank of England independent of government by decision of former Labour Chancellor of finance Gordon Brown, launched a program to print money for 170 billion pounds. That impression may increase if the recession worsens the situation.

The CBI, which brings together the captains of British industry, I consider it “a shot in the arm” and “surpasses anything expected.”

the measures adopted after the bank CEO, Canadian Mark Carney predicted the worst economic scenario since the banking crisis of 2008, after the Brexit. He warned that property prices will fall and it will cripple the recovery of living standards of the British.

This decision by the Monetary Board of the Bank of England exceeds market expectations, which considers the stimulus “a bazooka”. Reducing this rate can damage the profits of banks and savings British companies. So he launched a scheme for them, supported by the committee, to 100 billion pounds, over four years, with an interest of 0.5 per cent, to continue the growth of confidence in the economy.

the Bank of England said the economy will be 2.5 percent lower in 2018 than they anticipated in their pre Brexit analysis. Unemployment will grow 4.9 percent to 5.4 percent in 2018. The salaries will grow less than 3 percent was expected. The pressure on family finances increase. The picture is the first demonstration of what it will cost the British their decision to choose the Brexit in the referendum on Europe.

The governor Mark Carney, who is Canadian, and Monetary Committee seek to prevent a recession in the kingdom. But even with the cuts in the interest rate and the bazooka stimulus, growth in the second half of the year will be reduced. It will reach 0.8 percent in 2017 and not the 2.3 percent that had been predicted three months ago. Coinciding with the decisions of the Monetary Committee, the National Institute of Economic and Social Research announced that the policies of the Bank of England may expand the economy to 0.5 percent. Without them it would have needed two years to get it, according to his vision.

Not everyone agrees with them. Andrew Sentance, senior analyst at Price Waterhouse Coopers, believes that the real growth of the economy will be given “when the government makes clear the nature of its relationship with the European Union”. Carney, Governor of the Bank of England, said that “we will be watching,” if banks pass these interest rates to their operations. Seek with her recover and increase confidence in the economy.

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