Bank of England drops interest rate

The Bank of England has this morning announced that the Monetary Policy Committee (MPC) voted unanimously to reduce Bank Rate by 50 basis points to 0.25%.

The Bank of England has this morning announced that the Monetary Policy Committee (MPC) voted unanimously to reduce Bank Rate by 50 basis points to 0.25%.

In a statement just released the Bank said

Although the magnitude of the economic shock from Covid-19 is highly uncertain, activity is likely to weaken materially in the United Kingdom over the coming months. Temporary, but significant, disruptions to supply chains and weaker activity could challenge cash flows and increase demand for short-term credit from households and for working capital from companies. Such issues are likely to be most acute for smaller businesses. This economic shock will affect both demand and supply in the economy.

The Bank Rate is the interest rate that banks use to set interest rates on mortgages and secured loans, any change in the Bank Rate usually sees changes to mortgage interest rates for consumers within a few days.

You can read the full statement here on the Bank of England website.

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