Of course, the main news outlets will generally concentrate their reportage on the cut in the Bank of England base rate. It is easier to explain than the other policy changes announced today. There are three other measures which will probably have a bigger impact and which are much more interesting to talk about. First, the Bank is going to buy corporate bonds in the market. This is a super-charged version of QE because yields are generally higher than for gilts, and people are more likely to reinvest the cash into other higher-yielding assets. The Bank expects corporate bond buying to provide a stronger sugar rush than for gilt based QE.
Second, the Bank is going to provide cheap loans to banks to lend out to the private sector. The loans will be contingent on them being re-lent, so stockpiling should not happen. This could lower market interest rates.
Finally, more QE Classic. Are we returning to a world in which monetary and fiscal policy support each other? The government's borrowing costs should remain low for a bit longer and this should enable the Chancellor to announce some big infrastructure projects in the autumn.
I would favour Crossrail 3, perhaps running between Gatwick and Stansted via central London. This could open up Stansted's existing spare capacity as well as spur much-needed housing development in the outer parts of London in the route. Also, maybe the required roads and rail projects to allow Heathrow to be expanded could be underwritten..
In the North, inter-city and regional rail could be expanded.
Your pet projects, valued readers?