Mark Carney , governor of Bank of England (BoE) , unveiled on Thursday an “exceptional” stimulus package , which it included the first rate cut from the Bank of England in seven years, in response to the beating he received estimates of economic growth after the vote in favor of Brexit .
members of monetary policy board voted unanimously to cut the benchmark rate by 25 basis points, to place it at a record low of 0.25 percent. However, the vote was it divided into some other elements of the package would increase the balance sheet of the central bank at 170 billion pounds.
“We take these measures because the economic outlook has changed markedly,” he said Meat and. . “All indicators have plummeted in most cases to levels not seen since the financial crisis, and some other historic lows”
The Bank of England launched two new schemes: a buy 10 billion pounds in corporate bonds investment grade and one which could reach 100 billion pounds- to ensure that banks continue to provide credit after applying the rate cut interest.
the agency also raised the overall objective of the program purchases of government bonds to 435 billion pounds from the 375 billion reached at the end of 2012.
WHICH WON
After the central bank announcements, financial assets in the UK suffered significant movements.
One of the winners were large-cap firms in the stock market in that country. The weakness of sterling boosted shares of multinational companies the main index of the country, the FTSE 100 . Thus, the benchmark index scored its first gain in four days.
The shares of British banks also made gains and a group of them reached their highest levels since the vote by the Brexit, partly because the BoE eased the suffering of low rates with a program of 100 billion pounds loans.
British vivienderas also reported benefits. The expectation that lower rates trigger the demand for mortgage loans pushed the Bloomberg UK Homebuilder more than 1.5 percent rate.
who lost
most affected in UK new asset was the pound, which lost 1.64 percent and settled at $ 1.3107. This was the biggest drop in three weeks and places it back at the levels reached after the Brexit, ie minimum of 31 years.
The pension funds and savers were also affected, since a reduction rate implies a lower return on your capital.
Finally, the Credit-Default Swaps , ie, insurance of default on the debt of British companies were also affected. The Markit iTraxx Europe index, which groups covering debt instruments of investment-grade companies in the country declined three basis points to 68 units, according to Bloomberg data.
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