Bank of England cuts interest rate to 0.1%

The Bank of England has cut the base rate of interest to 0.1% as the world economy shakes under the coronavirus pandemic.

The Bank of England’s Monetary Policy Committee (MPC) voted unanimously in favour of the rate cut.

In a statement, the central bank said:

“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.

“At its special meeting on 19 March, the MPC judged that a further package of measures was warranted to meet its statutory objectives.

“It therefore voted unanimously to increase the Bank of England’s holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by £200 billion to a total of £645 billion, financed by the issuance of central bank reserves, and to reduce Bank Rate by 15 basis points to 0.1%.”

The central bank will also increase its holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by £200 billion.

 


About the Author

Philip Braund spent 16 years at the Daily Mirror as a reporter and news editor before moving to ITV. He was the series producer of the ground-breaking investigation programme The Cook Report, Managing Editor at ITV's Millbank Studios, and Head of News at ITV Central. He has won national and regional Royal Television Society awards for documentaries.



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