Brit Interest rate slashed again in national emergency’s interest rate has been slashed again to a record low as Prime Minister Boris Johnson declared a station of national emergency.
As the threat from coronavirus continues to grow, Britain’s government has taken a series of unprecedented steps to protect lives and protect the economy.
In a special broadcast to the nation, the Prime Minister announced a series of measures which amounted to a lockdown of the country, except for certain clearly defined reasons.
He concluded: “We will beat the coronavirus and we will beat it together and therefore I urge you at this moment of national emergency to stay at home, protect our NHS and save lives.”
Emergency rate cut
Previously the Bank Of England slashed the base interest rate to just 0.1% – the lowest it has ever been in the Bank’s 325 year history.
New governor Andrew Bailey announced an emergency rate cut to 0.25% just a week earlier, but warned at the time that further action might be necessary.
In addition to the new cut the Bank announced its intended to increase its holdings of UK government and corporate bonds by a further £200 billion in an effort to reduce the cost of borrowing in a difficult market.
Finance expert Andrew Montlake said: “This dramatic rate cut… is ultimately a symbolic one but it shows the absolute carnage that Covid-19 is wreaking across the UK and global economy.
“For the Band Of England to cut rates right to the bone highlights the extraordinary times we are living in.
Mr Bailey added that the second emergency cut had been made after the financial markets had become borderline disorderly with fears that there would be a rush to buy US dollars at the expense of sterling and lending to the UK government.
He told journalists: “We’ve seen very sharp moves in financial markets in the last few days, which is the pace of which frankly, was increasing very rapidly.
And we were moving into conditions that were if not disorderly, frankly, bordering on disorderly let me put it that way.”
Looking to the future he said he had seen a number of private forecasts about the economic impact of the virus, saying: “We don’t have a precise forecast – every picture we look at has a very sharp V in it.”
He said the situation remains under close scrutiny and the Monetary Policy Committee will be meeting again in a week’s time.