Carney throws the kitchen sink

For all the fuss about the Bankof England cutting interest rates and restarting its QE programme, it signifies practically nothing.

"What a shock," says Alistair Osborne in The Times. Bank of England Governor Mark Carney actually did something he said he was going to do. Having noted last month that the Bank's Monetary Policy Committee (MPC) expected monetary policy to be loosened in August, he duly delivered the first interest-rate cut in seven years. The base rate fell from 0.5% to 0.25%, a new record low.

He also restarted quantitative easing (QE) buying bonds with newly created money. The Bank will purchase another £60bn worth over the next six months, and extend the programme to £10bn of corporate bonds. There was also a "term funding scheme" worth up to £100bn to offer banks cheap loans to ensure they pass on the cut in interest rates. Throw in the government's hint that it could loosen fiscal policy, says Bank of America Merrill Lynch, and the package amounted to "the kitchen sink and a bit of next door's sink too". The markets liked it: sterling fell, the yield on the ten-year gilt fell to another record low under 0.65%, and equities bounced.

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Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.