Over to you, chancellor

Philip Hammond Image copyright PA

This is further than the bank was expected to go.

Although a cut of quarter of a percent was not a surprise, a specific message that it could fall further towards zero by year end was unexpected.

Add to that an additional £70bn pumped into the system through buying bonds with newly created money plus another £100bn of cheap money made available to banks for lending and it is clear the Bank of England has real concerns about the economy.

It has slashed its growth forecast for the UK economy next year from 2.3% to just 0.8% - and that's including the impact of today's measures.

While describing this package as comprehensive and co-ordinated, the Bank was very clear about what it could NOT do.

While it can increase the SUPPLY of credit while protecting the profit margins of the the banks who offer it, it can't increase the DEMAND for it.

Future

Businesses may be more concerned with things that only the government can address.

In a time of post-Brexit uncertainty, businesses will be understandably reluctant to invest until they get a better idea, for example, of the government's plans for tax and spending, as well as our future relationship with the UK's biggest trading partner.

In the last few hours, the former chancellor, George Osborne, has taken to social media to call for lower business taxes and increased infrastructure spending.

The British Chambers of Commerce have echoed that, calling for the government to "offer incentives for business investment and address some of the long-term, structural issues facing the UK economy, such as our chronic underinvestment in infrastructure".

The CBI joined in saying the government needed to take "swift, decisive action to unlock key infrastructure investment and show that the UK is open for business".

Tools

The governor said all of today's measures could, and in the case of lower rates very likely would, be taken further but was also clear that he is looking for the government to do its part to shore up the UK economy.

In a statement this afternoon, the Chancellor, Phillip Hammond, said he was confident that both he and the governor "had the tools available to support the economy".

Today we saw the Bank of England show its toolkit, businesses will want a bit more detail on what's in the chancellor's.

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