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The Bank of England today announced it will cut interest rates to .25%, a new historic low. This is the first interest rate cut since the BoE set rates to .5% in 2009, and a continuation of the global trend to push rates closer to 0% (and below.) The BoE also announced a new quantitative easing program that will buy £10 billion corporate bonds and expand its holdings of government debt by £60. While many expected the Bank of England to take action follow last June’s Brexit vote, the QE announcement surprised some bank watchers.

As ZeroHedge pointed out this morning, one reason for the new round of QE from the BoE is the increase in cash “hording” following Brexit. Pounds have been leaving the banking sector for the security of private holdings in record numbers, with Sky News reporting that:

In the weeks following the EU referendum, the rate at which households and businesses built up holdings of UK banknotes and coins rose above 8% a year for the first time since 2009, according to a Sky News analysis of Bank of England statistics…. [T]he proportion of UK banknotes circulating outside the banking system — in people's pockets, stored at home and outside the country — has now hit the highest level since 1979, as a percentage of GDP.

This flight to the security of cash was predicted by Dr. Joseph Salerno back in June:

With Brexit, the Brits liberated themselves from the massive, overweening and despotic EU superstate. In its wake, investors may now begin to liberate their cash from government-issued debt by hoarding it in private vaults.

Should the BoE’s actions fail to relieve the concerns of Brits worried about financial security, James Carney, Governor of the Bank of England, indicated a willingness to cut rates further in the future. He did, however, criticize the grown trend of negative interest rates:

I’m not a fan of negative interest rates. We see the negative consequences of them through the financial system, we’ve seen that in other jurisdictions, we see the issues with savers.

In response to the BoE’s actions, former MEP Godfrey Bloom – who famously evoked Murray Rothbard on the floor of the European Parliament expressed his own concerns: