The UK became the first country in the world to respond to the coronavirus by having its central bank directly finance its government, rather than through the intermediary of the government debt market. It involves the government’s account at the Bank of England (the “Ways and Means facility”) being extended to a temporarily unlimited amount. That will enable the government to raise money faster in the short term, avoiding the need to tap the gilts market.
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.
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.
We reached a record high in the 4th quarter of last year and average pay has surpassed its pre-crisis peak after more than a decade. In the three months to the end of December, the employment rate rose to 76.5 per cent as an extra 180,000 people found work, taking the total number of workers to 32.9 million.