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UK interest rates cut, funds freed up to ease coronavirus impact

Published:Wednesday | March 11, 2020 | 1:41 PM
Britain's Chancellor of the Exchequer Rishi Sunak stands outside No 11 Downing Street and holds up the traditional red box that contains the budget speech for the media, he will then leave to make budget speech to House of Commons, in London, Wednesday, March 11, 2020. Britain's Chancellor of the Exchequer Rishi Sunak will announce the first budget since Britain left the European Union. (AP Photo/Kirsty Wigglesworth)

LONDON (AP) — Britain took bold steps on Wednesday to cushion the economic shock of the coronavirus outbreak, as the government announced a 30 billion-pound stimulus package and the Bank of England slashed its key interest rate to a record low of 0.25%.

UK Treasury chief Rishi Sunak said the new virus sweeping the globe — arguably the biggest economic shock since the global financial crisis 12 years ago — would have a “significant” economic impact, but it would be temporary.

“We are doing everything we can to keep this country and our people healthy and financially secure,” Sunak said. “We will get through this together.”

In the government’s annual budget, Sunak announced measures including extra funding for the health service, sped-up sick pay and benefits payments for people who are off work, and relief for struggling businesses.

He said the government would refund the cost of sick pay to firms with less than 250 employees and would provide cheap loans for small businesses struggling because of the COVID-19 illness.

Sunak said the measures, which include 7 billion pounds for people and businesses, 5 billion pounds for the health service and 18 billion pounds in other spending this year, would “protect the vast majority of businesses through the worst of the crisis.”

In a coordinated move, the Bank of England earlier reduced its key rate from 0.75% to 0.25% to help support businesses and consumer confidence.

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