Base Rate 0.25% (-25bps from 0.50%)
QE Total £435 Billion (Up from £375 Billion)
The cut in Base Rate was the minimum that the MPC could get away with, but the key is that there was no descent.
In fact the majority of the MPC look for Base to be near zero by year end. Therefore the next inflation forecasts will be as crucial
as the downward revisions in growth.
The increase in QE was shrouded in a split on the MPC, but it will now embrace corporate bonds.
Now there are already straight laced economists saying that the BOE is moving beyond the remit of monetary policy, but I suggest
that this is exactly the time that the central bank has to be aggressive. So I am frustrated that there was not a move to zero Base Rate straight away.
Yes, the decision to leave the EU has created a supply side shock, but that can be corrected by a combination of ULTRA EASY MONEY
and hard hitting supply side measures which should be mapped out in the Autumn Statement.