Bank of England Slashes Interest Rates

Bank of England Slashes Interest Rates

Two exchange platforms have today highlighted how the Bank of England have taken the precautionary step against Coronavirus with 0.5 percentage point cut to interest rates.

Both Avatrade and eToro simultaneously drew traders’ attention to the cuts to lows that haven’t been seen since the 2008 financial crisis. The move has been described as a “targeted and co-ordinated” alongside government offices to help fend off any threat to the UK economy from the Coronavirus which is continuing to cause havoc market-wide. The purpose of these cuts is to ensure those who need financial assistance through the crisis will be able to find it and allow them to function during a time where many people are being forced to stay at home from work.

Your capital is at risk.

However, the UK was not the first country to take this decision, as only last week the same move was made by the US Federal Reserve. In their case, doing so resulted in a mass selloff on the stock market which, eToro pointed out, wasn’t seen at such a large scale since the Lehman Brothers collapsed during that same financial crisis. eToro explained that “it seems international central banks and governments are under no illusions that both the Coronavirus and the measures that will have to be taken to prevent it spreading could inflict serious damage on business and the economy.”

Of course, this has become only too clear in recent weeks. Not only due to the self-isolated workforce, but due to the other precautions that are being taken worldwide. Notably, entertainment and leisure industries, with there being many sports events being called or even held behind closed doors. As well as the limitations being put on travel and numerous other decisions being taken by the public in reaction to the virus which is likely to contribute to an already existing economic slowdown.

To some extent, this interest rate cut was to be expected as plans for a “fiscal stimulus package for the UK economy” as a means to oppose to the effect of the virus were laid out a month ago when the spread was still in its early stage. Even as far back as then, it was obvious that there was going to be an issue for the UK economy and without doubt, the impacts are going to be very large. However, the question, for now, is the time-scale of these impacts and how long the dire economic situation will be felt across the UK.

This precautions so far are not doing much to prevent the drop of the FTSE 100 in the UK though. During the time it took for the announcement of the interest rate slash to be made the market had dropped by 1% alone. This then increased to 1.2% and then up to 2% over the course of the day. This has meant that the “FTSE has fallen more than 1,600 points – or 20% — in the last month.” While an on-going oil debate is further adding the current situation that is looking increasingly harder to resolve. In regard to this, duty has been frozen on fuel again which will likely benefit some industries when used in conjunction with the current low fuel price.

Other precautions have been taken to ensure that businesses do continue to weather the storm. Bars and restaurants are set to receive a reprieve and duty on beer and spirits will be frozen, while the business tax on pubs will see a discount raised from £1,000 to £5,000, all of which is to combat the self-isolated quarantine of their usual consumers.

All in all, the situation is looking like one that is very haphazard so you should go to eToro to get your ducks in a row.

Ready to join our tribe?

We respect your email privacy

Subscribe now to recieve exclusive updates and offers!

Recently Similar News

Latest Guides

Latest News

Binance,Bitcoin,SEPA

Binance Suspends SEPA Inward Payments Until Further Notice

Binance Suspends SEPA Inward Payments Until Further Notice Binance has just announced that it has temporarily stopped all incoming SEPA payments. As a result, users will no longer be able to deposit euros using the primary European payments network. The world’s largest cryptocurrency exchange did not provide any specific information regarding the reason behind this […]

12 July, 2021
Bitcoin,Cryptocurrency,Investment

Why are Crypto Holders Worried of Declaring Their Ownership?

Cryptocurrencies have been popularly regarded as the future of finance globally. Investing in virtual coins has become a lot easier than it was a few years ago with the evolving crypto industry. Over the last few years, Bitcoin has caused a lot of buzz in the market. It has established itself as the de facto […]

8 July, 2021
Bitcoin,CoinMarketCap,Trading

Bitcoin On The Rebound Following Elon Musk’s Latest Announcement

The price of the world’s largest cryptocurrency is rising again following the latest comments from Elon Musk. Bitcoin’s price has climbed and stayed above $40,000 on Monday 14th June, following an announcement by Musk that Tesla will, once again, start accepting BTC payments. The latest comments have proven once more what a powerful influence the […]

16 June, 2021
Bitcoin,Cryptocurrency,Regulation

Bitcoin Is Now Legal Tender In El Salvador

The world largest cryptocurrency has become a legal currency in El Salvador. Following a congressional vote held on Tuesday, a significant majority agreed to adopt Bitcoin and use it alongside the country’s other currency, the US dollar. In the words of El Salvador’s President, this decision has made “history”. Within the next 90 days, all […]

10 June, 2021
advertisement,Cryptocurrency,Google

Google Updates Its Advertising Policy To Allow Crypto Ads

Global search engine giant, Google, has announced that it will be accepting cryptocurrency advertisements targeting customers in the US. This change to the tech giant’s financial products and services ads policy is expected to be made at the start of August 2021. As a result, operators of cryptocurrency exchanges and wallets will be able to […]

8 June, 2021
Bitcoin,Coinbase,Trading

Coinbase Stock Loses Over 25% Since April IPO

It was hailed as one of the greatest moments in cryptocurrency history. The Coinbase IPO was seen as the tipping point of the sector, a moment when cryptocurrencies will finally find their well-deserved place within the financial industry. Interest was high, and when Coinbase (COIN) began trading on the Nasdaq on April 14, 2021, the […]

26 May, 2021
Bitcoin,Cryptocurrency,Social Media

Bitcoin Drops by Over 30% to $30,000 After Another of Elon Musk’s Tweets

Tesla’s CEO and among the top three richest people in the world, Elon Musk, has yet again sent Bitcoin and other altcoins on a wild ride that saw the markets bleed after massive sell-offs. In a flurry of tweets that begun on Sunday, Elon seems to have implied that Tesla would liquidate its Bitcoin holdings. […]

20 May, 2021
Blockchain,Investment,Technology

Tune In To The 4th Edition of the AIBC Pitch

On the 25th of May 2021, Dubai will once again play host to the much-anticipated Draper-Aladdin AIBC Startup Pitch. 100 companies operating in the exciting fields of AI, Blockchain, Quantum Tech, FinTech, Big Data and IoT will be showcasing their ideas to investors and other stakeholders. Up to $500,000 can be won by any single […]

16 May, 2021