The UK central bank on Thursday cut interest rates to 0.1%, its second emergency rate cut in just over a week, and pledged to buy another £200 billion of UK government and corporate bonds in a fresh attempt to help the British economies amid the coronavirus outbreak.
The Bank of England said: “In light of actions to tackle the spread of the virus, and evidence relating to the global and domestic economy and financial markets, the Monetary Policy Committee (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.
“At its special meeting on 19 March, the MPC judged that a further package of measures was warranted to meet its statutory objectives.
“It therefore voted unanimously to increase the Bank of England’s holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by £200 billion to a total of £645 billion, financed by the issuance of central bank reserves, and to reduce Bank Rate by 15 basis points to 0.1% …”