Name: Bank of England reduces interest rates!
Uploaded: 2020-03-17T05:26:57.000Z
Duration: 4 min 40 s
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The Bank of England has brought in a Siri's of measures to help the U.

K through the current global situation on this includes lowering the bank rate by half a percent.

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The Bank of England Monetary Policy Committee, or MPC, took the decision to lower interest rates from North 0.75% to north 0.25% at a nun programmed meeting yesterday.

The bank also brought in some other measures to smooth the economy over the short term toe help the U.

K through any financial turmoil caused by this global situation.

The bank says that the size of any economic shock is highly uncertain, but that 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 on dhe increased demand for short term credit from households on dhe 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, so the bankers put in place measures to alleviate the situation.

To reduce the bank rate by half a percent, together with the decision to maintain the level of quantitative easing at current levels.

Onda new funding Scheme to help Small a medium size businesses called the T F S M E, which could allow access to borrowing at very close to that north 0.25% bank rate.

On top of that, the bank's financial policy Committee, or F P C, has reduced something called the counter cyclical capital buffer rate from 1% to 0%.

The counter cyclical capital buffer is there to make banks at capital in the good times, ready to smooth through the rough times on the F.

P C thinks this will remain a 0% for about a year on the Prudential Regulation Authority has set out its supervisory expectation that banks should not increase dividends or other distributions such as bonuses.

In response to these policy actions, the Bank of England also says that the release of the counter cyclical capital Buffer will support upto £190 billion of bank lending to businesses that is equivalent to 13 times banks net lending to businesses in 2019 together with the TF s m e.

This means that bank should not face obstacles to supplying credit to the UK economy and of meeting the needs of businesses and households through temporary disruption as well as the Bank of England has operations in place to make loans to banks in all major currencies on a weekly basis, banks have prepositioned collateral with the Bank of England, enabling them to borrow around £300 billion through these facilities.

These announcements come in the last week of Mark Carney's bank governorship on will, of course, be designed to dovetail neatly in with today's budget statement by the chancellor.

Those banking boards have been busy, haven't they?

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