Sterling is recovering against the euro this morning after the Bank of England carried out an emergency interest rate cut, slashing rates by 50 basis points to 0.25%. The Bank has said, “the reduction in Bank Rate will help to support business and consumer confidence at a difficult time.” This is the first emergency rate cut in over a decade, the last one taking place during the financial crisis in 2008.
In Mark Carney’s final week as BoE Governor, the Bank are also launching a scheme to provide funding for businesses struggling with the shock of coronavirus and reducing the amount of capital that banks need to hold, freeing up extra lending opportunity for businesses.
This afternoon, the UK government will announce plans for its own fiscal response in the Spring Budget. The new Chancellor of the Exchequer, Rishi Sunak, will have had to change his original Budget to address coronavirus issues, and is expected to announce extra money for health services. It’s also expected that he’ll reveal spending plans for infrastructure, the climate emergency and pension reform.
We’ll also see the release of GDP, Industrial Production and Manufacturing Production figures this morning.
