The Bank of England made an emergency interest rate cut this morning, just hours before the UK’s Budget was announced. The Pound fell across the board after the central bank opted to reduce rates from 0.75% to just 0.25% to support businesses, the economy, and consumer confidence amid the spread of the coronavirus.
The move comes as central banks around the world attempt to support their economies amid the coronavirus spread, which threatens to push the global economy to the brink of recession. Markets will also be keen to see how the European Central Bank reacts in its meeting tomorrow, with speculation that the bank will cut rates further into the negative, as well as introducing other stimulus measures. The US Federal Reserve is also expected to make another cut to rates this month, after an unscheduled cut last week.
This afternoon, new Chancellor to the Exchequer Rishi Sunak announced his first Budget, which included a £30bn coronavirus package. Although growth forecasts were also cut, the Chancellor said that these revisions hadn’t taken into account the impact the coronavirus could have. Further commitments to infrastructure, such as road building and upgrades, broadband, and affordable housing were also announced, as well as investment in research and development. Other promises include a rise in the National Insurance threshold, higher stamp duty for non-resident buyers, financial assistance for small businesses, corporation tax and fuel duty freezes, more NHS funding, and work to begin on 40 new hospitals.
If you’d like to discuss how today’s developments and upcoming events could impact your currency transfer, contact your Dealer, or call us on 020 7989 0000.
Interbank exchange rates (correct as of 13:55pm)
GBP/USD – 1.29515
GBP/EUR – 1.1409
GBP/CAD – 1.7781
GBP/AUD – 1.9825
GBP/NZD – 2.0495
GBP/JPY – 135.395
GBP/CHF – 1.2078