Thread by @faisalislam

Extraordinary monetary policy move from Bank of England to provide maximum possible monetary stimulus.

Rates cut to all time record low of 0.1%

Biggest ever announcement of asset purchases (ie QE) of £200bn in corporate and government bonds, designed to lower longer term rates

“majority of additional asset purchases will comprise UK government bonds.” bankofengland.co.uk/monetary-polic…

***NEW:
Governor Andrew Bailey said todays emergency moves were done against a background of “borderline disorderly” markets yesterday as sterling fell sharply and UK borrowing costs went up

He also said some “caused” by the “lockdown rumours” (which emerged in Westminster)

BoE Governor Bailey: “I do have to say there were rumours this time yesterday that there was going to be a lockdown in London. And I’d observe that did cause market prices to start moving around at that point. But I think government has been clear, that is not the intention”

Bailey: Bank needing to be “on the offensive” because “We can’t wait for the hard economic data it will be too late by then”, he said. “We don’t have a precise forecast - every picture we look at has a very sharp V in it”.

Bailey reiterated his lack of enthusiasm for zero or negative interest rates because of their impact on the banking system’s capacity to lend, and suggested that was the reason for limiting the cut to an unusual 0.15% (rather than the usual 0.25% or 0.5%) to a record low of 0.1%

For employers facing cash crunch employment decisions Governor Bailey said: “‘Pls get in touch with your bank, if your bank is not very helpful I am more than happy to
intervene, I have intervened once or twice already. ……”