Oil prices have fallen due a combination of the Saudi oil price war and a glut in supply due to lack of demand.
The US Senate has struck a $2,200,000,000,000 deal. This helped the DJIA jump 11.4% the best one-day gain since 1933. The Fed has also restarted QE. In QE3 the Fed purchased $60b per month, now they are purchasing $125b per day.
The UK base rate is cut to an all-time low of 0.1% and the Bank has also announced an emergency £200bn of bond buying.
Sterling fell to its lowest level against the US dollar for 3 decades as the USD strengthened amid fears about the economy.
The UK has announced loan guarantees of £330bn, France €300bn, US $1,200bn to support the economy.
Another emergency cut was announced reducing the rate down to 0.25%. Also to increase global liquidity the USD swap line between central banks was enhanced.
A travel ban was announced between Europe and the US.
We have summarised Mr Sunak the new Chancellor’s 2020 budget for you.
- National Insurance (NI) threshold raised to £9,500 up from £8,632
- Pension taper increased to £200,000 from £110,000 – this helps pension funding restrictions
- Junior ISA annual limits increased to £9,000 from £4,368. Adult limit remains at £20,000.
- In the UK the income tax rates and allowances remain at £12,500 for the personal allowance and £50,000 the higher rate threshold
- The Capital Gains Tax (CGT) allowance has increased to £12,300 for individuals
- The Inheritance Tax (IHT) residence nil rate band increases to £175,000 taking the overall IHT allowance up to potentially £500,000 per person
- Entrepreneurs Relief lifetime allowance reduced to £1million
- Off-payroll working rules (IR35) reform still scheduled for April 2020
- Corporation tax rate to remain at 19%
The Bank of England has announced an emergency unscheduled 0.5% cut in
the bank rate.
The interest rate cut is part of a series of a comprehensive and timely package of measures to help UK businesses and households bridge across the economic disruption that is likely to be associated with Covid-19.
The Fed reduced rates by 0.5% but the markets fell. This is first time the Federal Reserve cut its policy rate since the financial crisis to ease fears that the coronavirus epidemic would trigger a recession.