Bank of England take drastic measures to counteract impact of coronavirus
The Bank of England (BofE) slashed interest rates from 0.75% to 0.25% this morning to help the UK economy following the effects of the coronavirus outbreak.
It is hoped the policy will help British businesses and households manage through the shock of the coronavirus that has already seen some of the biggest falls in shares since the 2008 financial collapse.
The BofE said it would also free up billions of pounds of extra lending power to help banks support firms.
The outgoing governor of the Bank of England, Mark Carney, said there had been a: "sharp fall in trading conditions" including spending on non-essential goods.
"These measures will help to keep firms in business and people in jobs and help prevent a temporary disruption from causing longer-lasting economic harm. "
Despite the Bank of England’s actions, it confirmed in the statement that it maintained its target for government bond purchases to £435bn and its corporate bond purchase target at £10bn.
Even so, Mr Carney warned that the overall impact of the virus’ spread on the UK economy is still an unknown entity but that it could shrink in the next few months.
Mr Sunak later told ministers that coronavirus was "front and centre" and the Budget would "make the UK one of the best placed economies in the world to manage the potential impact of the virus”.
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