Economists have been warning against the threat that covid-19 causes to our economy – which in the UK is already facing its weakest year of growth since 2009. Ahead of today’s Budget announcement, the Bank of England has launched an emergency rate cut, providing the economy with a much-needed stimulus.
Such cuts are normally agreed during meetings of the Monetary Policy Committee (MPC), responsible for making decisions about Bank Rate. But given the circumstances, the MPC called an emergency vote and unanimously decided to slash the rate by 50 basis points from 0.75% to 0.25%.
The announcement should come as a relief for small and medium-sized businesses, and means that with the wider package of measures expected in the budget, additional incentives for SMEs should hopefully address uncertainty in the market. Since the cuts were announced at 7am this morning, the FTSE 100 index of leading shares has reacted cautiously to the news.
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