The Bank of England (BoE) has cut its interest rate by 15 basis points to 0.1% as the central bank moves to reduce the “economic shock” stemming from the coronavirus pandemic.
After an emergency meeting on 19 March, the bank's Monetary Policy Committee (MPC) also voted in favour of an additional £200bn of government bonds and sterling non-financial investment-grade corporate bonds purchases, bringing the total to £645bn.
The BoE explained the decision was necessary following action taken by the bank and chancellor Rishi Sunak throughout the month to tackle the economic impact of the pandemic.
It said the MPC had now determined that the bank's measures need to go further, and also voted unanimously to enlarge the Term Funding Scheme for SMEs.
The BoE also explained that the majority of additional asset purchases will comprise UK government bonds, which will be "completed as soon as is operationally possible, consistent with improved market functioning".
Ahead of its next MPC meeting on 25 Match, the BoE said it will issue further guidance to the market in due course.
History is made for UK monetary policy.— Ben Chu (@BenChu_) March 19, 2020
Bank of England policy rate cut to 0.1%
It's never been lower since the Bank was founded in 1694 pic.twitter.com/ozN5RkQBhu
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