Sterling fell against the euro again today after the Bank of England took a series of steps to support the UK economy, including an interest rate reduction of 0.25% and a plan to buy £60 billion of government debt to offset the consequences of the vote to leave the EU.

The rate cut was expected for some time, which had put pressure on the currency, and was the first since 2009. The bank’s main lending rate is now at a record low of 0.25%, and the central bank said it expected the economy to stagnate for the rest of this year and show weak growth throughout 2017.

“Following the United Kingdom’s vote to leave the European Union, the exchange rate has fallen and the outlook for growth in the short to medium term has weakened markedly,” said governor Mark Carney (pictured).

The bank also implemented a measure to ensure the cut is passed on to consumers by commercial banks. As well as cutting rates to the record low of 0.25%, the BoE launched two new schemes, one to buy £10 billion of high-grade corporate bonds and another, potentially worth up to £100 billion, to ensure banks keep lending even after the cut in interest rates.

The bank reduced its estimate of UK growth next year to  0.8% from its previous estimate of 2.3%. The growth outlook for 2018 was cut to 1.8%.

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The BoE also revised its inflation forecasts sharply, due to the big fall in sterling since the financial crisis, predicting it will hit 2.4% in 2018 and 2019. Its Monetary Policy Committee said the costs of trying to bring it back to its 2% target in the immediate future would exceed any benefit.

Sterling sank 1.5% against the dollar and the euro after the decision.

“The Bank of England has hit a perfect ‘High Five’ at today’s meeting, over-delivering against market expectations and bucking the recent trend of central banks disappointing,” said Nick Gartside, portfolio manager at JP Morgan Asset Management.

Mike Amey of Pimco said: “By extending the quantitative easing programme over the next six months, and the corporate bond buying programme over the next 18 months, the MPC has indicated that it expects to be in easing mode for a good while.”

The lowest cost 0.25% rate will apply only to banks that maintain or expand net lending — the BoE will charge a penalty rate to banks which reduce net lending.

The MPC said it could adjust the terms and length of the scheme, which is funded by central bank reserves, and the value of lending will be determined by usage of the scheme and could go as high as £100 billion .