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Central bank's Brexit plan 'not a game-changer'

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World

Central bank's Brexit plan 'not a game-changer'

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COMING UP:Central bank's Brexit plan 'not a game-changer'

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00:00:00
>> It's the Bank of England's biggest intervention in Britain's banking market in four years, a quarter point interest rate cut aimed at easing the economy through a period of uncertainty. There's also 100 billion pounds of new funding for lenders to help them pass on the right cut to borrowers.
00:00:16
Bank Governor Mark Carney says there's no excuse for not passing on the cut in full, but Reuters' economics correspondent David Milliken says some companies are reluctant to play along.>> The challenge for some banks is that they already raise funds at rates cheaper than the Bank of England is offering.
00:00:34
So that means that, if they do actually cut rates for borrowers, they will end up sort of making less profit, or potentially even a loss than they would before. Another factor as well is that the economic outlook is getting a bit darker as well, and so banks may be more concerned that sort of mortgages might turn bad or business loans also sort of might turn bad as well.
00:00:54
>> The central banks moved quickly to try and stimulate the economy after Britain' s decision to quit the EU. But it could take months for competitive forces to kick in, prompting banks to lower their lending rates.>> I think the bank will be hoping that there will be an impact fairly quickly, but certainly of the Bank of England Deputy Governor Ben Broadbent, when I was speaking with him last week it was clear that this isn't going to be instant, that it is something that will take a bit of time to feed through.
00:01:19
>> Analysts say the bank's post-Brexit plan is likely to provide no more than a small boost to the economy, but they say it won't be a game changer.