Europe stocks slide after BoE and ECB meetings
The major European benchmarks have slipped this afternoon (August 2nd) following the Bank of England (BoE) and European Central Bank's (ECB) policy meetings.
Investors may not have been surprised by the Threadneedle Street institution's decision for August, as its Monetary Policy Committee (MPC) has elected to keep interest rates at their historic low and opted not to increase its quantitative easing (QE) programme.
The BoE has kept interest rates at their record 0.5 per cent nadir for more than three years now, but it had been suggested the central bank was willing to knock this figure down further.
MPC members voted not to up stimulus pumped into the UK economy by way of QE - an outcome that may have been expected.
Only last month, the BoE increased QE by £50 billion, taking the total programme to £375 billion.
Under this form of stimulus, fresh money is injected into the banking system in a bid to boost lending and therefore encourage businesses and consumers to borrow, spend, recruit and expand.
The BoE and government's Funding for Lending scheme, which was announced yesterday, may do well to erase any need for further QE in the near-term, as it will give banks and building societies access to cash at better-than-market rates in the hopes these institutions will pass on their savings in cheaper loans to small to medium-sized enterprises and first-time buyers.
Investors were less impressed by the ECB policy meeting's outcome, which also led to interest rates sticking at their 0.75 per cent historic low after this was cut from one per cent last month.
President Mario Draghi promised to take action in the coming weeks, but the markets may have been expecting more significant proposals for the ailing single currency region.
At 16:05 BST, the FTSE 100 was lower by 0.2 per cent to 5698.6 points, while the Dax and Cac 40 also lost ground, with the German index slipping one per cent to 6685.8 points and the French benchmark retreating 1.2 per cent to 3280.8 points.
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