Bank of England Returns Key Interest Rate to 0.25% after Unscheduled Emergency Session of the MPC
March 11, 2020
At an unscheduled meeting of the Bank of England’s Monetary Policy Committee, members voted unanimously to cut the base rate by 50 basis points, thus reversing the two 25-bp hikes engineered in November 2017 and August 2018 and restoring the rate to the post-Brexit level of 0.25% reached in the second half of 2016. According to a released statement, this action is intended to ” to support business and consumer confidence at a difficult time, to bolster the cash flows of businesses and households, and to reduce the cost, and to improve the availability, of finance.” The committee also unveiled a new term funding mechanism with incentives to aid smaller firms. The statement asserts that, “although the magnitude of the economic shock from Covid-19 is highly uncertain, activity is likely to weaken materially in the United Kingdom over the coming months.”
Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank of England
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