Bank slashes rates to record low of 0.1% to shore up coronavirus-hit economy

The Bank of England has slashed interest rates to a new historic low of 0.1% and unleashed another £200 billion to boost the economy in its second emergency move in just over a week to combat the coronavirus hit.

The Bank – headed by new governor Andrew Bailey – cut rates from 0.25% to the lowest level on record as it repeated its warning that the economic impact of the Covid-19 outbreak could be "sharp and large".

Members of the Monetary Policy Committee (MPC) voted unanimously at a special meeting to cut rates and to fire up the money printing presses, by increasing its so-called quantitative easing programme by £200 billion to £645 billion.

Policymakers have also upped its new Term Funding Scheme support for small firms.

The Bank said: "The spread of Covid-19 and the measures being taken to contain the virus will result in an economic shock that could be sharp and large, but should be temporary."

It added the latest emergency action comes after "evidence relating to the global and domestic economy and financial markets" as stocks plunge at record rates worldwide.