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The FTSE 100 increases by 1.83% to 5,173 points after the Bank of England cuts interest rates

The FTSE rose this afternoon after the Bank of England cut interest rates to a historically low rate of 0.1 percent and released another £ 200 billion to boost the economy in its second emergency measure in just over a week to hit the coronavirus hit. combat.

The Bank – headed by new Governor Andrew Bailey – cut interest rates from 0.25 percent to the all-time low, reiterating the warning that the economic impact of the Covid-19 outbreak could be ‘sharp and big’ .

After the news, the FTSE 100 index rose 1.83 percent to 5,173 points and had dropped nearly 140 points earlier today.

It came a day after the pound fell to a 35-year low against the US dollar when the chancellor of the chancellor’s £ 350 billion corona virus did not calm markets.

European stock markets initially recovered today as investors were calmed down by the European Central Bank’s incentive to buy bonds worth € 750 billion (£ 708 billion) aimed at mitigating the economic damage caused by the outbreak of the coronavirus.

In first deals, the London FTSE 100 index rose 1.6 percent to 5,163.95 points and the DAX in Frankfurt rose 1.9 percent to 8,603.44. But it continued to falter until the Bank of England’s announcement.

Recent declines have wiped out more than half a trillion pounds of the FTSE 100 index in less than three weeks, with the top flight losing nearly 11 percent of its value last Thursday in its biggest one-day decline since 1987.

The pound also suffers from the dollar. It hasn’t been so weak since 1985, when the Plaza Accord was signed by the world’s richest countries to weaken the dollar and pull the US economy out of recession.

Sterling was one of many currencies that were refueled as investors rushed to put their money in US dollars, the world’s most liquid currency and seen as a safe haven in times of crisis.

It’s because London will be plunged deeper into the lock-up within days – and possibly with just 12 hours’ notice – amid fears that the ‘super spreader city’ is causing the British coronavirus outbreak.

After the daily death rate has doubled to 33 yesterday, residents of the capital will impose stricter restrictions on their movements – with signals, the government will urge people to stay at home unless absolutely necessary.

After news of the interest rate cut, the FTSE 100 index rose 1.83 percent to 5,173 points, down nearly 140 points earlier today

After news of the interest rate cut, the FTSE 100 index rose 1.83 percent to 5,173 points, down nearly 140 points earlier today

LAST TWO DAYS: Yesterday, the FTSE lost over 3 percent as it staggered on the fringe of the psychologically significant 5,000 level. But despite early morning increases, it dropped 1.3 percent later in the morning to 5,011.44

LAST TWO DAYS: Yesterday, the FTSE lost over 3 percent as it staggered on the fringe of the psychologically significant 5,000 level. But despite the early morning rises, it dropped 1.3 percent later in the morning to 5,011.44

LAST TWO DAYS: Yesterday, the FTSE lost more than 3 percent when on the brink of the psychologically significant 5,000 level

The Bank - headed by new Governor Andrew Bailey (pictured) - cut interest rates by 0.25 percent to the all-time low as it repeated the warning that the economic impact of the Covid-19 outbreak is 'sharp and big' could be

The Bank - headed by new Governor Andrew Bailey (pictured) - cut interest rates by 0.25 percent to the all-time low as it repeated the warning that the economic impact of the Covid-19 outbreak is 'sharp and big' could be

The Bank – headed by new Governor Andrew Bailey (pictured) – cut interest rates by 0.25 percent to the all-time low as it repeated the warning that the economic impact of the Covid-19 outbreak is ‘sharp and big’ could be

Members of the Monetary Policy Committee (MPC) voted unanimously at a special meeting to lower rates and start up the printing presses for money by purchasing what is known as the quantitative bond easing program at £ 200 billion to £ 645 billion.

Policy makers have also increased new support for term financing for small businesses.

The Bank said, “The spread of Covid-19 and the measures being taken to curb the virus will lead to an economic shock that can be sharp and large, but should be temporary.”

It added that the latest emergency measures come after ‘evidence regarding the global and domestic economy and financial markets’ as stocks worldwide are falling at record rates.

Mr. Bailey told reporters that the MPC planned to act after “very sharp moves in the financial markets” on Wednesday meant the situation was “going to be disordered.”

The Bank also said conditions in the UK government bond market have “worsened”, with gilts reaching new lows for fear of the coronavirus’s impact on growth.

Mr Bailey added that if the economy deteriorates as a result of the pandemic, the bank will still have “room for maneuver” and may look to “new financial instruments” as an incentive.

The move comes after the bank already cut interest rates from 0.75% to 0.25% in an unplanned announcement last Wednesday.

Craig Erlam, senior market analyst at Oanda, said that according to the latest measures, the bank “throws the counter to the corona virus.”

But he said the rate cut was “largely symbolic,” with the cuts so close to zero actually having little effect on consumer spending power and financing costs.

He added, “emphasizes how little space the bank has to maneuver on the traditional side.”

“Whether that will be enough to cut layoffs and prevent good companies from going bankrupt, we’ll have to wait and see,” he said.

Mr. Bailey – who took over from Mark Carney on Monday – said yesterday that he would not rule out giving money directly to households and businesses to deal with the corona virus crisis.

In an interview with Sky News, Mr Bailey said the Bank of England was not done and indicated that it would consider radical measures to keep people financially upright if necessary.

Following the announcement of the expanded stimulus program, ECB chief Christine Lagarde (pictured) tweeted that 'extraordinary times require extraordinary action. Our commitment to the euro knows no boundaries'

Following the announcement of the expanded stimulus program, ECB chief Christine Lagarde (pictured) tweeted that 'extraordinary times require extraordinary action. Our commitment to the euro knows no boundaries'

Following the announcement of the expanded stimulus program, ECB chief Christine Lagarde (pictured) tweeted that ‘extraordinary times require extraordinary action. Our commitment to the euro knows no boundaries’

Chancellor Rishi Sunak and the Bank unveiled a £ 350 billion package for the economy on Tuesday, but many have said it still wasn’t going far enough.

The Bank confirmed that the MPC still plans to meet before next week’s scheduled meeting, with the decision to come on March 26, when it will also publish the minutes of the last tariff action.

Christine Lagarde, boss of the European Central Bank, also tweeted today that ‘extraordinary times require extraordinary action, as she announced an incentive to buy bonds for the economy. Our commitment to the euro has no limits. ‘

Those comments reflected the words of its predecessor Mario Draghi, whose pledge to “do whatever it takes” to preserve the eurozone was seen as a turning point in the region’s sovereign debt crisis.

The so-called Pandemic Emergency Purchase Program comes just six days after the ECB revealed a stimulus package for large banks that did not calm nervous markets and pressured the bank to open the financial locks.

The plan to buy additional government bonds and corporate bonds will only be finalized when the bank judges that the crisis phase of the corona virus Covid-19 is over, but at least not before the end of the year, ‘the ECB said in a statement.

The decision came after the bank’s 25-person board of directors held emergency calls late into the evening, after criticism that the bank was not doing enough to support the eurozone economy.

Mr. Sunak testified this afternoon to the Treasury Select Committee (pictured) when the pound bottomed out

Mr. Sunak provided evidence to the Treasury Select Committee this afternoon when the pound bottomed out

Mr. Sunak testified this afternoon to the Treasury Select Committee (pictured) when the pound bottomed out

In a tweet, French President Emmanuel Macron welcomed the ECB’s “exceptional measures” and urged governments to back this up with fiscal measures and “greater financial solidarity” in the currency club with 19 countries.

Shares in Tokyo opened more than two percent higher on news of the latest ECB support package.

It came after sterling fell to 1,175 against the dollar yesterday, while the FTSE lost more than 3 percent as it staggered on the verge of the psychologically significant 5,000 level.

The grim slide for the pound – to its lowest level since 1985 – came when Rishi Sunak defended his pack to keep the British economy afloat during the mounting crisis.

The pound is under great pressure as the dollar has appreciated since the crisis – worsened by the fact that the pound has completed one of the steepest declines in history.

Boris Johnson was also heavily criticized for his response to the situation, alleging that the blockade was imposed too slowly and that there was not enough testing.

Sterling fell as much as 1,175 against the US currency today, its lowest level since 1985

Sterling fell as much as 1,175 against the US currency today, its lowest level since 1985

Sterling fell as much as 1,175 against the US currency today, its lowest level since 1985

LAST MONTH: The FTSE 100 has collapsed since fears of the virus increased on February 24

Mr. Sunak gave evidence to the Treasury Select Committee this afternoon when the pound bottomed out.

But he denied that the British rescue package was smaller than in other countries, such as France.

He said, “Looking at the totality of the fiscal intervention and adding the 30 (pound) and the 20 (pound), that’s £ 50 billion, and then looking at that as a percentage of GDP for example, you can benchmark to most major economies and you would see that the totality of what we do compared to almost every major economy is very large so far and I think this is the right way to look at it …

“In terms of the overall quantum, I think on a benchmark basis, as we’ve done it, it seems like a very comprehensive package.”

Mr Sunak also said that measures for individuals and families will be set out “once they are developed and hopefully we can get broad support for them.”

When asked about the pound’s performance, Mr. Sunak insisted that the chancellors never comment on the currency.

Some commuters were still struggling with their work in London today, despite speculation that the lockdown could be tightened

Some commuters were still struggling with their work in London today, despite speculation that the lockdown could be tightened

Some commuters were still struggling with their work in London today, despite speculation that the lockdown could be tightened

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