Bank of England cuts base rate to 0.1%

The Bank of England has cut the base rate 0.1% and increased its holdings of UK government and corporate bonds by £200bn

The move comes only days after the government rolled out a multibillion package of loans and grants to support businesses facing the coronavirus crisis, which included business rate cuts for specific industry sectors including travel, hospitality and leisure.

The Chancellor told MPs yesterday that further details on the various business support measures would be released early next week.

In light of actions to tackle the spread of the virus, and evidence relating to the global and domestic economy and financial markets, the Bank of England’s Monetary Policy Committee (MPC) held an additional special meeting on 19 March. 

Over recent days, and in common with a number of other advanced economy bond markets, conditions in the UK gilt market have deteriorated as investors have sought shorter-dated instruments that are closer substitutes for highly liquid central bank reserves.  As a consequence, UK and global financial conditions have tightened.  

The next regularly scheduled MPC meeting will end on 25 March, with the minutes published on 26 March. 

The PM is due to deliver the daily press conference late this afternoon with some expectations that a level of lockdown will be announced.

The army is on standby with troops back at barracks and earlier today Transport for London closed all tube stations which are  not interchanges. Further services will be reduced later this week and train lines are planning to go to Sunday services from Monday 23 November.

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