A London bus passes the Bank of England in London, Thursday, Aug. 4, 2016. (AP Photo/Frank Augstein)
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The Bank of England swung into action Thursday against the economic shock from Britain's vote to leave the European Union, cutting interest rates to near nothing and unleashing billions of pounds to cushion the Brexit blow. In what one bank dubbed a "sledgehammer stimulus," the BoE cut interest rates 25 basis points to 0.25 percent and said it would buy 60 billion pounds ($79 billion) of government bonds with newly created money over the next six months.It also launched two schemes, one to buy 10 billion pounds of high-grade corporate debt and another – potentially worth up to 100 billion pounds – to ensure banks keep lending even after the rate cut.The bank said most BoE policymakers expected to cut the rate to even closer to zero later this year.The lowest cost of funding, the 0.25 percent bank rate, will be for banks that maintain or expand net lending to the economy and the BoE will charge a penalty rate if banks reduce net lending.
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