Bank of England base rate lowered to 0.1% and bond purchases increased by £200 billion

by Aaron Strutt

Mar 19 2020

The Bank of England’s Monetary Policy Committee (MPC) has launched a further package of measures to boost the economy to help combat the Covid 19 virus. 

The MPC 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. They also voted to reduce Bank Rate by 15 basis points to 0.1%.   

The Committee also voted unanimously that the Bank of England should enlarge the new term funding scheme with additional incentives for small and medium-sized enterprises (TFSME), financed by the issuance of central bank reserves.