The larger than expected measures pushed the British pound GBP=D4 down 1.6 percent on Thursday, its biggest fall in a month.
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The New Zealand dollar jumped to its highest in more than two weeks against the British pound after the Bank of England cut interest rates and delivered a bigger stimulus package than the market expected.
The Bank will re-start quantitative easing, expanding it by £60 billion, launch a £10 billion corporate debt buying programme and a new scheme worth up to £100 billion to encourage banks to lend.
Oil prices rose for a second straight day and US crude advanced firmly above the $40 a barrel mark on short-covering and after a modest stockpile drop at the delivery hub for USA crude futures.
ANALYST’S TAKE: More rate cuts and other easing measures look “very likely” in light of Bank of England governor Mark Carney’s “very negative” outlook in the event of Britain leaving the European Union, which foresees a rise in unemployment from 4.9 percent to 5.5 percent, said Angus Nicholson of IG in a report.
“The Bank of England has hit a ideal “High Five” at today’s meeting, over-delivering against market expectations and bucking the recent trend of central banks disappointing”, said Nick Gartside, a JP Morgan Asset Management portfolio manager.
The British central bank chose to cut its key rate from 0.5 to 0.25, its first rate cut in seven years.
Crucially, the Bank said Britain’s economy will still grow in 2017, though at a lower rate of 0.8 per cent, down from a previous expectation of 2.3 per cent.
The Labor Department said applications for unemployment aid rose to 269,000 last week, a level close to historical lows and a positive sign for the job market. While the pace of hiring and economic growth slowed in the first half of the year, consumers may boost spending in the months to come. It rose more than 3 percent Wednesday.
JACK CHOWS DOWN: Burger chain Jack in the Box reported better-than-expected results and raised its forecasts for the year.
TRIPADVISOR TUMBLES: Travel website operator TripAdvisor reported lower revenue growth and profit margins in the second quarter, and the results disappointed analysts. Its stock lost $3.56, or 5.1 percent, to $65.93.
Theme park operator SeaWorld said its revenue fell in the second quarter as guest numbers from Latin America dropped off amid economic turmoil there and bad weather.
OIL: Benchmark U.S. crude rose 98 cents, or 2.4 percent, to $41.81 per barrel in NY. Its stock gave up $2.03, or 13.7 percent, to $12.81. Brent crude, which is used to price global oils, added $1.04, or 2.4 percent, to $44.14 a barrel in London. Its stock gained $9.22, or 10.5 percent, to $96.95.
The euro was steady at US$1.1132 after losing 0.7 percent on Thursday. Germany’s DAX and France’s CAC 40 both rose 0.6 percent. Japan’s Nikkei advanced 0.6 percent. South Korea’s Kospi added 0.3 percent and Hong Kong’s Hang Seng index gained 0.4 percent.
The move pushed yields on 10-year United Kingdom government bonds, or Gilts, to a record low of 0.639 percent GB10YT=RR .
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Wall Street ended Thursday little changed ahead of the July U.S. nonfarm payrolls report which will be scoured for clues to whether it is strong enough to support a Federal Reserve rate hike as early as September.
