The Bank of England’s move earlier this morning to cut in interest rates from 0.75% to 0.25% is designed to provide stability in the UK economy in managing the growing impact from the COVID-19 outbreak.
The decision makers at The Bank of England through their actions this morning have immediately taken borrowing costs back down to the lowest level in history. The move was announced underlining support to businesses through freeing up the facility for UK banks to provide billions of pounds of extra lending power across the UK economy.
The move comes as the new Chancellor, Rishi Sunak later today in his first budget is widely expected to announce further substantial measures to support economic stability.
Outgoing Governor of the Bank of England, Mark Carney said: that he and colleague policy makers had seen a “sharp fall in trading conditions”, including spending on non-essential goods.
“The Bank of England’s role is to help UK businesses and households manage through an economic shock that could prove large and sharp, but should be temporary,” he continued.
His main message was that as the COVID-19 outbreak continued The Bank of England’s team would monitor other countries, like China, in direction of dealing with the issue, although the magnitude remained unclear.
He did not rule out interest rates being lowered further if required.
There will be many eyes on Rishi Sunak this afternoon in parliament as he presents his first budget. Almost all hospitality and catering businesses will be looking to see what measures are taken to specifically support our industry, they are much needed.