BoE holds rates as it warns of ‘severe’ coronavirus impact

The Bank of England has kept the base rate of interest at a record low of 0.1 per cent as it warned of “severe economic and financial disruption” caused by Covid-19.

the BoE said its monetary policy committee had voted unanimously to keep the interest rate at 0.1 per cent, saying the coronavirus and the measures to contain it were having a “significant impact” on the UK.

The BoE stated: “Economic data have continued to be consistent with a sudden and very marked drop in global activity. Oil prices have been volatile.

“The unprecedented situation means that the outlook for the UK and global economies is unusually uncertain. It will depend critically on the evolution of the pandemic, and how governments, households and businesses respond to it.”

The central bank is predicting that UK growth will fall by 25 per cent in the second quarter of 2020 but will then recover somewhat, leading to the British economy shrinking by 14 per cent over the course of the year.

The BoE rate has been held at a record low of 0.1 per cent since March 19 as part of its attempts to boost the British economy amid the current lockdown