As is all the trend now, the Bank of England announced further easing measures this afternoon in another unscheduled response to the coronavirus crisis.
The move triggered a little bit of activity in the pound, which has come under considerable pressure over the last week or so, before settled around the pre-announcement levels.
The biggest impact has come in government bonds, where the BoE stated it will focus much of the new asset purchases, with the program increased by almost 50%. This should alleviate some of the pressure that's built in the aftermath of the UK governments huge stimulus plans which will flood the market with new debt.
The rate cut is largely symbolic and highlights just how little room the Bank has to manouvre on the traditional side which the increase in the term funding scheme should provide additional relief to SMEs. Whether that will be enough to reduce layoff's and stop good businesses going bust, we'll have to wait and see. Both seem inevitable, even with all of this support.
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