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Global Markets: Bank of England slashes interest rate

By Commodity News Service Canada

WINNIPEG, August 4 (CNS Canada) – The following is a glance at the news moving markets globally.

BANK OF ENGLAND CUTS BENCHMARK INTEREST RATE TO NEW LOW

The Bank of England cut its main interest rate to 0.25 per cent from 0.5 per cent on Thursday, marking a new low in the central bank’s 322-year history.

In addition to the cuts, it also announced it will start buying corporate bonds in September, reviving a long-dormant UK government bond buying program, and said it has put aside billions of pounds in ultracheap four-year loans for banks to fuel lending.

Measures are being taken to stimulate the UK economy in the wake of the Brexit vote, an attempt to lessen the blow of a slashed growth forecast for next year.

The BOE cut growth forecasts from 2.3 per cent to just 0.8 per cent—the biggest downgrade ever between two sets of quarterly forecasts.

CANADA MONETARY RESERVES FALL US$617 MILLION

Canada’s official international reserves fell US$617 million in July from June, according to the federal Finance Department.

At July 29, the reserves of foreign currencies, gold and other monetary assets totalled US$82.904 billion, down from US$83.521 billion the previous month.

No official intervention in the foreign-currency market was reported in July, and the government had no gold holdings at the end of the month.

US JOBLESS CLAIMS EDGE UP, STILL POINT TO STEADY HIRING

The number of Americans applying for jobless benefits rose by 3,000 to a seasonally adjusted 269,000 in the week ended July 30, the US Labor Department said.

Economists had slightly lower expectations of 265,000 new claims for the month, however levels remain consistent with steady hiring.

The Labor Department said no special factors affected figures, and economists added there is no evidence of rising layoffs.

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