MNI POLICY: Bank of England Cuts Bank Rate 50Bps To 0.25%

     LONDON (MNI) - The Bank of England cut its benchmark Bank Rate by 50bps to

0.25% Wednesday and moved to introduce a new Term Funding scheme to provide

liquidity to smaller and medium-sized enterprises as the UK economy is hit by

coronavirus

     In a move ahead of the open of the London markets, the Monetary Policy

Committee announced it had voted unanimously to cut rates, maintain the current

stock of asset purchases and to introduce Term Funding with additional

incentives for smaller businesses.

     "The reduction in Bank Rate will help to support business and consumer

confidence at a difficult time, to bolster the cash flows of businesses and

households, and to reduce the cost, and to improve the availability, of

finance," the Bank said in a statement accompanying the decision.

     The Bank's regulatory arm said it would reduce the counter-cyclical capital

buffer to 0% of banks' exposure to UK borrowers with immediate effect.

     The rate had been set at 1% and was due to rise to 2% by December this

year. The 0% level is expected to be in place for at least 12 months, the Bank

said.

     The minutes of the special MPC meeting held on March 10 will be published

at 1200GMT on Friday. Governor Mark Carney and Governor-designate Andrew Bailey

will hold a press conference at 0900GMT on Wednesday.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

[TOPICS: M$B$$$,M$E$$$,MT$$$$,M$$BE$]