UK Pound Falls as Bank of England Cuts Interest Rate

The UK pound on Thursday fell over 1 percent against the US dollar after the Bank of England cut its interest rate in an effort to stimulate the country's economy.

MOSCOW (Sputnik) – Earlier in the day, the Bank of England, which is the United Kingdom's central bank, said that its Monetary Policy Committee (MPC) had voted unanimously to cut the bank's interest rate from 0.5 to 0.25 percent. The measure is designed to boost growth and push inflation up to the target of 2 percent, up from the current 0.5 percent. The bank also announced a quantitative easing program to purchase some £10 billion corporate bonds as well as buying some £60 billion worth of UK government bonds.

The UK currency later dipped over 1.1 percent against the US dollar, falling from over $1.33 per pound to nearly $1.31 per pound before rebounding slightly.

The pound also fell against the euro, tumbling 1.08 percent from 1.19 euros per pound to 1.18 euros per pound.

The Bank of England's interest rate has been at a record low of 0.5 percent since 2009, when it was lowered to stimulate the UK economy out of recession. On June 16, the MPC voted to keep the interest rate unchanged, but was later forced to change its mind as late June's Brexit referendum led to a worsening economic outlook and forecasts of recession later in the year.

In the referendum's outfall, the UK pound plunged around 10 percent against the dollar, falling from $1.48 per pound to around $1.3 per pound, which are the lowest levels since 1985.