The Bank of England has cut interests rate to a record low 0.1% in response to the Coronavirus outbreak.

The steps followed a prior rate cut which saw rates fall to 0.25% in an effort to support the economy through a coronavirus induced downturn.

The lower rates will ultimately flow through to home owners who will be feeling the effects of the economic shutdown.

Tom Stevenson, investment director for Personal Investing at Fidelity International, said: 

“Britain is now a whisker away from the negative interest rate club. Rates have never been this low in the more than 300-year history of the Bank of England. Purchases of government and corporate bonds have been ramped up. A desperate measure for a desperate situation.”

A desperate measure for a desperate situation.

“Both governments and central banks have quickly acknowledged that we face a sharp downturn. The question now is whether the Bank’s assumption that the hit will be temporary is correct. It could be. The infrastructure of global supply remains in place and global demand should bounce back quickly once the outbreak passes.”