Governor Mark Carney said the bank would lower the amount of capital banks are required to hold in reserve, freeing up an extra £150bn for lending, reports The Telegraph.
In March, Carney warned that Brexit posed significant near-term domestic risks to financial risks. Today, Carney said: “Some of those risks have begun to crystallise”. Since the Brexit vote the central bank governor said the UK has “entered a period of uncertainty and significant economic adjustment”.
He noted that the efforts by the Bank of England will not be able to fully and immediately offset the economic volatility that is to be expected ahead of divorce proceedings between the UK and the EU. He also urged people to remain “prudent” and to be careful if taking out a mortgage as conditions will be difficult.
Post-Brexit jitters continued to grip currency markets. The pound, which had already hit a new 31-year low in early trade, tumbled further in afternoon trade on Tuesday after Aviva Investors and M&G announced that they had suspended their property trusts.
Sterling fell to an intraday low of $1.30 against the dollar, down by more than 2 per cent – it last hit this level in 1985. In wild trading on Wednesday reminiscent of the fateful Friday when Britain voted to abandon the EU, sterling shed a full US cent in a matter of minutes to crater at $1.2798.
