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Bank of England cut its key rate to 0,25%

Exchange rate will reach 1.20 USD/GBP in near future

Baku. 4 August. REPORT.AZ/ The Bank of England cut interest rates for the first time since 2009 on Thursday and said it would buy 60 billion pounds of government debt to ease the blow from Britain's June 23 vote to leave the European Union.

Report informs referring to the Bloomberg, the central bank said it expected the economy to stagnate for the rest of 2016 and suffer weak growth throughout next year. It cut its main lending rate to a record low 0.25 percent from 0.5 percent, in line with market expectations.

But it also launched two new schemes, one to buy 10 billion pounds of high-grade corporate bonds and another - potentially worth up to 100 billion pounds - to ensure banks keep lending even after the cut in interest rates.

Sterling fell 1 percent against the dollar following the announcement, while British government bond yields hit record lows and the main share index rose by 1 percent.

Analytical Group of Report News Agency believes that the pound will continue to weaken in the near and medium term, and exchange rate will reach 1.20 USD/GBP. Investment portfolio of the State Oil Fund of Azerbaijan (SOFAZ) includes 1.194 billion GBP and it makes 4.7% of a total portfolio.

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