You are here: Home - Saving & Banking - News -

Bank of England cuts base rate to lowest ever 0.1%

Written by:
The Bank of England has cut interest rates from 0.25% to 0.1%, just a week after an emergency reduction from 0.75%.

At a special Monetary Policy Committee (MPC) meeting held today, the members voted unanimously to reduce the Bank Rate by 15 basis points to 0.1%. This is the lowest ever level in the history of the Bank.

This comes just over a week after the Bank cut rates from 0.75% in an attempt to support the economy in the wake of the coronavirus crisis.

The MPC also voted unanimously to restart its programme of Quantitative Easting (QE) by increasing the Bank of England’s holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by £200bn to a total of £645bn.

This will be financed by the issuance of central bank reserves.

The Committee also voted unanimously that the Bank of England should enlarge the Term Funding Scheme which encourages banks to lend to businesses.

With more cheap money from the government, this means banks won’t need to offer attractive rates to gain or retain customers. Just last week £100bn was announced for the scheme.

A statement read: “In light of actions to tackle the spread of the virus, and evidence relating to the global and domestic economy and financial markets, the MPC held an additional special meeting on 19 March.

“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. As a consequence, UK and global financial conditions have tightened.”

The next MPC meeting will take place on 25 March with minutes to be published on 26 March.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Seven ways to get help with energy bills this winter

We knew today’s announcement was going to be painful, but it’s still a shock to the system. When this kick...

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week