He added that all of the measures “have scope for further action”.
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Mr Carney also took a tough stance on banks and the introduction of its Term Funding Scheme. Bank stocks fell the most, as the interest rate cut suggests they won’t be able to make as much money on lending.
He added commercial banks had “no excuse” not to pass on the BoE’s rate cut to their customers.
The BOJ also said it would conduct “a comprehensive assessment” of the economy and the central bank’s policy effects at its next meeting in September. While it still predicts 2 percent growth this year thanks to strong growth before the vote, it slashed its forecast for next year to just 0.8 percent from its May estimate of 2.3 percent. The UK can handle change, he said.
“By acting early and comprehensively, the (Bank) can reduce uncertainty, bolster confidence, blunt the slowdown and support the necessary adjustments in the United Kingdom economy”, BoE Governor Mark Carney told a news conference.
But Mr Carney appeared to rule out the prospect of negative interest rates, saying he was “not a fan”.
The £60bn bond-buying programme, which increases quantitative easing to £435bn, was approved by a vote of 6-3, with Kristin Forbes, Ian McCafferty and Martin Weale preferring to wait until more concrete data is available rather than relying on surveys. A bold move would be, for example, to return to bond-buying at the level seen during the financial crisis – that is, 375 billion pounds – and other efforts to stimulate lending.
Only the U.S. Federal Reserve among the world’s main central banks is considering tighter policy this year.
This scheme removes depositors from the equation, giving banks direct access to cash from the Bank of England.
“There is a little bit of order being restored in the market today, but (it) is in a wait-and-see period ahead of the jobs report”, said Adam Sarhan, chief executive officer at Sarhan Capital.
The economy, it says, will be 2.5% smaller in three years’ time than it believed it would be when the Bank last opined on these matters in May.
‘Post-Brexit, what the market really needs is a balanced stimulus package to get Britain moving, without further increasing house prices. A weaker pound lifted shares of multinational companies in the FTSE 100 Index, sending the benchmark to its first advance in four days, while optimism over the economy boosted the FTSE 250 Index of mid-sized firms with more domestic exposure. “The falling pound means that inflationary pressures are already building up, and today’s decision will exacerbate them”. The unemployment rate is expected to edge down to 4.8 percent from 4.9 percent.
Previously officials had anxious that it would be hard to cut the base rate to below 0.5pc as banks would receive less money from loans, but would struggle to cut interest rates for savers any lower, as rates approach zero.
It seems clear that the general economic outlook has worsened considerably in the wake of the European Union referendum.
The Bank of England’s quarterly inflation report does not foresee a recession, although all of its forecasts take into account the stimulus measures.
Sterling was down 1.59 percent at $1.3110 and on track for the largest one-day fall against the dollar in a month.
Mr Carney has written to Chancellor Philip Hammond to outline the measures taken by the MPC as well as explaining why inflation remains, for now, significantly below its target rate.
“The real test of confidence is going to be the Autumn Statement, which could be usefully brought forward several weeks”.
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Lucy O’Carroll, chief economist at Aberdeen Asset Management, said the central bank had to act, “more for the sake of its own reputation than the economic benefits”.
