When Great Britain woke up cripplingly hungover after its saturnalia of nationalistic voting, it surveyed the trashed apartment in which it now lived - the holes punched in walls, the shattered windows, the empty liquor bottles, Liam Gallagher passed out in the corner - Great Britain grabbed a handful of Aspirin, pondered it's future outside Europe and moaned "Guess we better interest lower rates then."
Brexit was a right beano, whaddinit?
Now, after weeks of picking up chairs, throwing out pizza boxes, and cleaning up vomit, Great Britain has realized that all of its friends (other than Liam, who is still troublingly passed out) are looking at apartments in Dublin and Frankfurt. It had better do something about those rates...
The Bank of England said on Thursday that it would cut its main interest rate to its lowest point ever and expand other measures to bolster Britain’s economy over concern that the country’s decision to leave the European Union could weigh on growth.
But the Brexit is potentially one of the deepest self-inflicted wounds in modern economic history. Even the IMF has looked at GB's growth forecast and responded with "Oi, what's this bollocks?" How low can Mark Carney and the Bank of England go?
The central bank’s Monetary Policy Committee voted unanimously to lower its benchmark interest rate to 0.25 percent, the lowest level in the bank’s 322 years. The rate had been at 0.5 percent since March 2009.
Don't get any ideas though, economic theorists, cuz Carney is only willing to go to "Zed."
Mr. Carney also signaled on Thursday that the committee could cut rates further this year, but he ruled out the possibility of negative interest rates. The committee’s next meeting is set for November.
Carney is also embracing quantitive easing and basically staying loose and open to whatever the future might bring, like a normal British person. He is also going to put pressure on banks to keep the spigot for small business and household lending as open as possible, and get medieval on their asses should they not comply.
But mostly one assumes that Carney is hoping that Britain can cling to its passporting rights and stave off the kind of inexorable slide known only to Leeds United fans (Brit joke!). Or maybe the British people can allow their government to back out of this Brexit plan and let Carney keep British interest rates at "a smidgen."