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You can find the current article at its original source at https://www.theguardian.com/business/live/2016/aug/04/bank-of-england-interest-rates-stimulus-inflation-report-business-live
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| Bank of England press conference after interest rates cut - live updates | Bank of England press conference after interest rates cut - live updates |
| (35 minutes later) | |
| 2.56pm BST | |
| 14:56 | |
| Here’s our news story about how two of Britain’s biggest banks haven’t, yet, agreed to pass on today’s rate cut in full: | |
| Mortgage lenders delay moves to pass on interest rate cut https://t.co/0kxZRg2MpF | |
| 2.50pm BST | |
| 14:50 | |
| Larry Elliott, our economics editor, says Mark Carney has taken an “all action” approach to fighting a Brexit-induced recession. | |
| [The Bank] was slow to react to the great recession of 2008 and 2009, and was not going to be accused of making the same mistake twice. The risks of doing nothing were higher than the risks of providing oodles of fresh stimulus. | |
| The backdrop to the four-part package is the assumption that there is going to be a marked slowdown in activity as a result of the 23 June referendum. Recession is avoided, but only just and only because the Bank’s nine-strong monetary policy committee (MPC) assumes that lower interest rates, a new scheme to encourage commercial banks to pass on lower borrowing costs and £70bn worth of additional money creation will boost activity over the coming months and years. | |
| Related: This is the Bank of England's all-action response to Brexit | |
| 2.40pm BST | |
| 14:40 | |
| If you’re just tuning in, here’s our news story about the Bank of England’s historic rate cut: | |
| Related: Bank of England cuts interest rates to 0.25% and expands QE | |
| Here’s our explanation about quantitative easing - one of the four pillars of today’s stimulus package. | |
| Related: Quantitative easing: all you need to know | |
| And here’s our Q&A about the rate cut: | |
| Related: UK interest rate cut: how it will affect you | |
| 2.26pm BST | 2.26pm BST |
| 14:26 | 14:26 |
| UK borrowing costs hit record lows | UK borrowing costs hit record lows |
| UK government bonds are also soaring, following the news that the Bank of England will buy another £60bn of gilts. | UK government bonds are also soaring, following the news that the Bank of England will buy another £60bn of gilts. |
| This has driven down the interest rate on 10-year gilts down to 0.68%, from 0.78%. | This has driven down the interest rate on 10-year gilts down to 0.68%, from 0.78%. |
| That means the UK government can borrow cheaper than ever before - making it a great time to borrow to invest..... | That means the UK government can borrow cheaper than ever before - making it a great time to borrow to invest..... |
| 2.23pm BST | 2.23pm BST |
| 14:23 | 14:23 |
| Shares surge, but pound slumps. | Shares surge, but pound slumps. |
| The London stock market has surged since the Bank of England announced its new stimulus package. | The London stock market has surged since the Bank of England announced its new stimulus package. |
| The FTSE 100 index has jumped by 97 points, or 1.5%. Financial stocks are leading the rally, with Aviva up 7%, Standard Chartered up 5.3%, and Prudential gaining 3.5%. | The FTSE 100 index has jumped by 97 points, or 1.5%. Financial stocks are leading the rally, with Aviva up 7%, Standard Chartered up 5.3%, and Prudential gaining 3.5%. |
| And the smaller FTSE index, which is more focused on the UK economy, has gained 1.3%. | And the smaller FTSE index, which is more focused on the UK economy, has gained 1.3%. |
| The pound continues to slide, though; sterling has lost two whole cents against the US dollar to $1.314. | The pound continues to slide, though; sterling has lost two whole cents against the US dollar to $1.314. |
| That’s a chunky fall, but still higher than immediately after the Brexit vote. | That’s a chunky fall, but still higher than immediately after the Brexit vote. |
| £/$ drops on #BankofEngland stimulus, but still not at previous low. Median analyst estimate for yr-end = $1.27 pic.twitter.com/8tacMa34aD | £/$ drops on #BankofEngland stimulus, but still not at previous low. Median analyst estimate for yr-end = $1.27 pic.twitter.com/8tacMa34aD |
| 2.10pm BST | 2.10pm BST |
| 14:10 | 14:10 |
| Lloyds Banking Group also hasn’t decided whether to pass on today’s rate cut in full. | Lloyds Banking Group also hasn’t decided whether to pass on today’s rate cut in full. |
| It says tracker mortgages *will* be cut, but it hasn’t decided what to do about its standard variable rate. | It says tracker mortgages *will* be cut, but it hasn’t decided what to do about its standard variable rate. |
| Here’s the statement: | Here’s the statement: |
| The Bank of England base rate is only one of a number of factors that we take into account when reviewing interest rates. The 0.25% reduction will form part of the ongoing rate reviews across our product ranges. All variable rate products that track the Bank of England base rate will be reduced by 0.25% from September. | The Bank of England base rate is only one of a number of factors that we take into account when reviewing interest rates. The 0.25% reduction will form part of the ongoing rate reviews across our product ranges. All variable rate products that track the Bank of England base rate will be reduced by 0.25% from September. |
| Updated | Updated |
| at 2.16pm BST | at 2.16pm BST |
| 1.49pm BST | 1.49pm BST |
| 13:49 | 13:49 |
| Santander says it is passing the interest rate on to customers in full: | Santander says it is passing the interest rate on to customers in full: |
| From the beginning of September 2016, Santander’s Standard Variable Rate will be 4.49%. | From the beginning of September 2016, Santander’s Standard Variable Rate will be 4.49%. |
| The Alliance & Leicester Standard Variable Rate on mortgages will also be reduced by 0.25% to 4.74%. | The Alliance & Leicester Standard Variable Rate on mortgages will also be reduced by 0.25% to 4.74%. |
| 1.45pm BST | 1.45pm BST |
| 13:45 | 13:45 |
| Jill Treanor | Jill Treanor |
| Mark Carney’s stern warning to Britain’s banks to pass on today’s rate cut may have fallen on deaf ears at Royal Bank of Scotland. | Mark Carney’s stern warning to Britain’s banks to pass on today’s rate cut may have fallen on deaf ears at Royal Bank of Scotland. |
| Even as the Bank of England governor was telling reporters that there is ‘no excuse’ not to pass the cut on, RBS - bailed out by the taxpayer in 2008 - was quick to announce it had not decided whether to do so yet. | Even as the Bank of England governor was telling reporters that there is ‘no excuse’ not to pass the cut on, RBS - bailed out by the taxpayer in 2008 - was quick to announce it had not decided whether to do so yet. |
| Its NatWest arm has 17% of its customers on standard variable rate [SVR] mortgages. Here’s the statement: | Its NatWest arm has 17% of its customers on standard variable rate [SVR] mortgages. Here’s the statement: |
| The Bank of England base rate has reduced today from 0.5% to 0.25%. | The Bank of England base rate has reduced today from 0.5% to 0.25%. |
| Existing NatWest customers with Fixed Rate products will not see a change in their rate during their fixed rate period. | Existing NatWest customers with Fixed Rate products will not see a change in their rate during their fixed rate period. |
| We are currently reviewing whether we will make any changes to Variable Rate products and will provide an update in the near future. | We are currently reviewing whether we will make any changes to Variable Rate products and will provide an update in the near future. |
| For those customers on Base Rate Linked products, we will reduce their rate by 0.25%. | For those customers on Base Rate Linked products, we will reduce their rate by 0.25%. |
| 1.37pm BST | 1.37pm BST |
| 13:37 | 13:37 |
| And that’s the end of Mark Carney’s press conference. I’ll pull a summary together shortly. | And that’s the end of Mark Carney’s press conference. I’ll pull a summary together shortly. |
| Former chancellor George Osborne has already given his verdict: | Former chancellor George Osborne has already given his verdict: |
| BoE right to use triple whammy of lower official rates, QE & funding scheme to support demand.But only a temporary answer as economy adjusts | BoE right to use triple whammy of lower official rates, QE & funding scheme to support demand.But only a temporary answer as economy adjusts |
| Must be matched by permanent supply side reform:lower biz taxes, free trade with EU & unambiguous message we're open to overseas investment. | Must be matched by permanent supply side reform:lower biz taxes, free trade with EU & unambiguous message we're open to overseas investment. |
| Updated | Updated |
| at 1.41pm BST | at 1.41pm BST |
| 1.34pm BST | 1.34pm BST |
| 13:34 | 13:34 |
| Carney: Can't imagine how helicopter money would help | Carney: Can't imagine how helicopter money would help |
| Q: What’s your view of helicopter money? [IE, trying to stimulate the economy by handing cash directly to the public]. | Q: What’s your view of helicopter money? [IE, trying to stimulate the economy by handing cash directly to the public]. |
| Mark Carney deploys his most dismissive tone, saying he doesn’t see the merit in the idea...and “cannot conceive” a situation where such a “flight of fantasy” would help the UK. | Mark Carney deploys his most dismissive tone, saying he doesn’t see the merit in the idea...and “cannot conceive” a situation where such a “flight of fantasy” would help the UK. |
| Carney now channelling Meghan Trainor's No on negative interest rates. 'have been abt as clear as I can be on that' pic.twitter.com/HHSmcp8ReH | Carney now channelling Meghan Trainor's No on negative interest rates. 'have been abt as clear as I can be on that' pic.twitter.com/HHSmcp8ReH |
| 1.31pm BST | 1.31pm BST |
| 13:31 | 13:31 |
| Q: Can Mark Carney reassure investors about his commitment to steering the UK economy through the troubled times ahead, by promising to stay until 2021? | Q: Can Mark Carney reassure investors about his commitment to steering the UK economy through the troubled times ahead, by promising to stay until 2021? |
| [Background: Carney signed up to a 5-year term in 2013, but could potentially serve eight years]. | [Background: Carney signed up to a 5-year term in 2013, but could potentially serve eight years]. |
| Carney says it’s an “absolute privilege” to serve at the Bank of England. But he’s been working flat out for months, and hasn’t had a moment to reflect on the issue. | Carney says it’s an “absolute privilege” to serve at the Bank of England. But he’s been working flat out for months, and hasn’t had a moment to reflect on the issue. |
| 1.27pm BST | 1.27pm BST |
| 13:27 | 13:27 |
| Broadbent: House prices expected to fall next year | Broadbent: House prices expected to fall next year |
| Q: What is the Bank of England’s forecast for house prices? | Q: What is the Bank of England’s forecast for house prices? |
| Deputy governor Ben Broadbent says any fan chart on house price would be as wide as any other fan chart it produces (ie, it doesn’t really know). | Deputy governor Ben Broadbent says any fan chart on house price would be as wide as any other fan chart it produces (ie, it doesn’t really know). |
| But the central case is that house prices experience a “small decline” next year, but then pick up again as average wages rise. | But the central case is that house prices experience a “small decline” next year, but then pick up again as average wages rise. |
| 1.23pm BST | 1.23pm BST |
| 13:23 | 13:23 |
| Ben Chu of the Independent tries to bowl Mark Carney out with a great question. | Ben Chu of the Independent tries to bowl Mark Carney out with a great question. |
| He reminds the governor that he was criticised for forecasting a recession if Britain voted to leave the EU, because his forecasts didn’t include a post-Brexit stimulus programme (as we’ve seen today). So, does today’s announcement vindicate them? | He reminds the governor that he was criticised for forecasting a recession if Britain voted to leave the EU, because his forecasts didn’t include a post-Brexit stimulus programme (as we’ve seen today). So, does today’s announcement vindicate them? |
| Carney plays a straight bat (ice hockey stick?), pointing out that the Bank’s ‘fan charts’ show a range of possibilities for growth (including a recession). | Carney plays a straight bat (ice hockey stick?), pointing out that the Bank’s ‘fan charts’ show a range of possibilities for growth (including a recession). |
| Carney not totally ruling out recession. doesn't use r-word but says ppl can look at fan charts, see what may happen beyond the central case | Carney not totally ruling out recession. doesn't use r-word but says ppl can look at fan charts, see what may happen beyond the central case |
| Updated | Updated |
| at 1.23pm BST | at 1.23pm BST |
| 1.23pm BST | 1.23pm BST |
| 13:23 | 13:23 |
| 1.18pm BST | 1.18pm BST |
| 13:18 | 13:18 |
| Carney repeats that banks have ‘no excuse’ not to pass today’s interest rate cut onto customers. | Carney repeats that banks have ‘no excuse’ not to pass today’s interest rate cut onto customers. |
| He adde that he doesn’t want to see UK bank deposit rates fall below zero. | He adde that he doesn’t want to see UK bank deposit rates fall below zero. |
| Quote of day from Mark Carney: “Banks have no excuse for not passing on this rate cut” We may hear one or two excuses in the coming days | Quote of day from Mark Carney: “Banks have no excuse for not passing on this rate cut” We may hear one or two excuses in the coming days |