LONDON (AP) — The Bank of England cut ts key interest rate by 0.5 % to 0.25% on Wednesday, as an emergency measure in response to the outbreak of COVID-19.
The central bank said the move would “help support businesses and consumer confidence at a difficult time.”
It said the effect of the new coronavirus on the British economy could be significant, with activity likely to “weaken materially” in the coming months.
The bank said in a statement that the rate cut was part of a ” comprehensive and timely package of measures to help U.K. businesses and households bridge across the economic disruption that is likely to be associated with COVID-19.”
“These measures will help to keep firms in business and people in jobs and help prevent a temporary disruption from causing longer-lasting economic harm,” it said.
Britain has confirmed 373 cases of COVID-19, and six deaths.
The U.K. government is due to announce more measures to support the economy in a budget later Wednesday.
Treasury chief Rishi Sunak is considering measures to stimulate an economy already weighed down by uncertainty over Britain’s future trade relationship with the European Union.
Business groups urged Sunak to let firms defer tax payments, and to back emergency loans for struggling enterprises. Unions sough a guarantee that self-employed and contract workers will get sick pay if they have to stay home.
The virus is hitting closer to the heart of the British government. On Tuesday, Nadine Dorries, a junior minister in the Department of Health, said she is self-isolating as she recovers from the virus.
The Times of London reported that Dorries first showed symptoms on Friday and had since worked in Parliament, held meetings with constituents and attended an International Women’s Day reception with Prime Minister Boris Johnson.