DHAKA: UK interest rates have been cut from 0.5% to 0.25% and the Bank of England has signaled that they could go lower if the economy worsens.

The Bank announced a range of measures to stimulate the UK economy, including a £100bn scheme to force banks to pass on the low interest rate to households and businesses, BBC reports on Thursday (Aug 4).

It will also buy £60bn of UK government bonds and £10bn of corporate bonds.

Governor Mark Carney said there was scope to cut the interest rate further.

He said that a majority of the nine-member Monetary Policy Committee (MPC) backed reducing the interest rate further if subsequent data showed the economy was deteriorating.

The governor said that banks have ‘no excuse’ not to pass on the lower borrowing costs to customers and will be charged a penalty if they fail to do so.

The Bank also announced that the biggest cut to its growth forecasts since it started making them in 1993.

It has reduced its growth prediction for 2017 from the 2.3% it was expecting in May to 0.8%.

BDST: 1844 HRS, AUG 04, 2016
SAS/RR

** UK interest rate cut in 7 years expected