Coronavirus – Bank of England cuts base rate to 0.1%
The Bank of England has cut its base rate to a record low of 0.1% – warning the coronavirus pandemic will result in a “sharp and large” economic shock.
Its rate-setting committee, led by new governor Andrew Bailey, also decided at its unscheduled meeting to re-start the post-crisis asset purchase programme, also known as quantitative easing.
The Bank said it would make an extra £200bn in bond purchases, effectively printing new money to push into the financial system, to support activity as the coronavirus crisis threatens to shut down the economy.
The monetary policy committee (MPC) had cut Bank rate to 0.25% from 0.75% only a week ago.
It said the unanimous decision was part of moves “to meet the needs of UK businesses and households in dealing with the associated economic disruption.”
The MPC is due to meet again next Wednesday as governments and central banks globally adjust to the deterioration in business activity as western economies descend into lockdown conditions.
The chaos has sparked panic selling on stock markets while the pound has fallen to levels against the US dollar not seen for 35 years.
Source: Sky News