Sunak and Carney hold banking summit to discuss coronavirus outbreak
The Chancellor and the Governor of the Bank of England held a banking summit today to discuss a coordinated response to support small and medium sized businesses affected by coronavirus.
Mark Carney and incoming BoE Governor Andrew Bailey outlined the measures that the Bank announced yesterday morning to help mitigate the economic impact of the outbreak.
The Bank slashed interest rates to just 0.25 per cent in a bid to tackle the fallout of the spread of coronavirus on the economy. The 0.5 percentage point cut takes interest rates to their lowest level in the Bank’s history.
It also cut banks’ capital buffer – the amount of cash they must hold in case of a crisis – from one per cent of the amount they have loaned out to zero per cent.
“It’s essential that we work together to help UK businesses manage through the potentially large but ultimately temporary disruption caused by Covid-19,” Carney said.
Rishi Sunak reiterated the actions outlined in his Budget statement yesterday, which included an abolition of business rates for small firms for a year, and statutory sick pay relief.
It also includes a new coronavirus business interruption loan scheme, which provides lenders with a guarantee of 80 per cent on each loan.
Sunak said: “Today’s summit demonstrates that the Government’s response is clearly and closely coordinated with the Bank of England, and that we are working with the banking sector to do everything it takes to support businesses through this difficult time.”
Earlier this week, banking chiefs committed £20bn to small and medium sized businesses who need additional finance and support over the coming months.
Stephen Jones, chief executive of industry body UK Finance, said: “We urge all businesses to think about how their customers and suppliers could be affected by this global outbreak and to contact their finance providers as early as possible if they think they might have any additional financing requirements.”
Get the news as it happens by following Morning Wire on Twitter.