LONDON (AA) – Britain cut interest rates on Thursday for the first time in more than seven years and boosted quantitative easing to boost the flagging economy in the wake of Brexit.
The Bank of England (BoE), the country’s central bank, announced it had cut the benchmark rate to a record low of 0.25 percent. It had been at 0.5 percent since March 2009.
Pound sterling has lost around a tenth of its value against the U.S. dollar since Britain voted in June by a 52-48 percent margin to leave the European Union.
“Following the United Kingdom’s vote to leave the European Union, the exchange rate has fallen and the outlook for growth in the short to medium term has weakened markedly,” the BoE said, but added it still expected the U.K. economy to grow in the second half of 2016.
The bank said it would also resume its quantitative easing program, the process of buying assets using electronic money to inject liquidity into the economy.
The program will be increased to £435 billion ($572.9 billion), the first expansion since 2012.
In a statement U.K. finance minister Philip Hammond said he welcomed the bank’s decision, adding: “As recent figures on jobs and growth have shown, we enter this period of adjustment from a position of economic strength.”