In the aftermath of the landmark Brexit vote, the Governor of the Bank of England, Mark Carney, indicated that the UK could see an interest rate cut over the summer.

Today was that day, as the central bank reduced the cost of borrowing from 0.50% to 0.25%. This is first UK interest rate cut in over 7 years (March 2009 being the last).

Currency markets had already anticipated this move, in light of poor economic data since the results of the Brexit vote, plus lowering business and consumer confidence.

The introduction of an additional stimulus package has caused sterling to weaken even further. The Bank of England also announced that they will increase the current QE programme by an additional £60bn – from £375bn to £425bn, as well as purchasing £10bn of UK corporate bonds.

After coming under much pressure, the Bank of England has now acted. So what next for currency markets?

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* Information courtesy of Currencies Direct
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