The Bank of England has thus joined the club of central banks in developed countries that have relaxed their monetary policy, as has the European Central Bank, the Bank of Canada and the Swedish Riksbank.
Note that the vote in favour of a lower key rate was very close within the Bank of England, with only 5 votes in favour against 4 for the status quo. Major British money-changers continue to be concerned about the price drift. Although UK inflation has fallen to 2%, the rise in prices excluding food and energy remains strong (3.5%). Wages, which are driving up the price of services, also continue to rise strongly.
In the coming months, the Bank of England will carefully monitor price developments before each monetary decision. But given the cyclical weakness of the UK economy, there is no doubt that it will continue to lower its key interest rate. But it will take time for the UK economy to be truly boosted by lower interest rates.
British equities are a small diversification for the less risk-sensitive investors.