A round-up of the key points after yesterday's rate cut by the Bank of England, and the introduction of what one economist dubbed its "bazooka surprise".
1. Interest rates were cut by 0.25% in a widely expected move, in the Bank of England's first rate adjustment since March 2009. The MPC voted unanimously in favour of the decision.
2. Although there were indications of further cuts, Carney has ruled out negative rates saying the lower bound range will remain positive.
3. In addition, the BoE announced a three-part £170bn stimulus package which includes £60bn in more government debt buying, £10bn in corporate bond purchases and up to £100bn towards the new Term Funding Scheme for banks.
4. Extending the existing £375bn asset purchasing programme, the BoE will buy a further £60bn in government bonds immediately. The total government bond buying programme is now £435bn.
5. QE has been extended to include corporate bond purchases from around 150 investment grade companies. The minimum purchases from each issuer will be around £100m and the Bank will exclusively carry out QE in the secondary debt markets, according to the FT.
6. The new Term Funding Scheme, replacing the Funding for Lending Scheme, is to help banks and building societies reduce deposit and lending rates and fully pass on the rate cut to customers. The scheme will provide up to £100bn for banks at interest rates close to the BoE rate.
7. The Bank has downgraded its UK growth expectations by the largest amount in 20 years but expects the country to narrowly avoid recession. The growth expectations for 2016 as a whole remain at 2%, but growth forecasts for 2017 have been cut from 2.3% to 0.8%, and the 2018 forecast has been downgraded from 2.3% to 1.8%.
8. CPI inflation expectations have been revised higher from 1.5% to 1.9% by the third quarter of 2017, and from 2.1% to 2.4% in Q3 2018 and Q3 2019.
9. Equity markets responded positively to the package, which was slightly more than anticipated, with the FTSE 100 up 1.4% to 6,730.2 points. The FTSE 250, which had seen divergence from its large-cap peers in the wake of the Brexit vote, is also up 1.3% to 17,220.
10. Sterling has fallen 1.4% against the US dollar in afternoon trading to $1.3142 as Carney said the depreciation in the pound will boost exports and weigh on imports, while the yield on UK 10-year gilts fell 12 basis points to a new record low of 0.67%.
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