FTSE 100 claws back loses with near 5% rise of 220 to 5,371 points as markets rally after Bank of England cut interest rate to 0.1% and pumped £200bn into economy to combat coronavirus crisis
- Bank, headed by new governor Andrew Bailey, cut rates to lowest level on record
- FTSE’s recovery followed gains by global markets overnight after stimulus moves
- The chancellor is set to reveal another huge coronavirus bailout for Britain today
- Coronavirus symptoms: what are they and should you see a doctor?
The FTSE 100 today rallied with a near five percent rise of 220 points to reach 5,371 as markets reacted favourably to the Bank of England’s decision to cut interest rates 0.1% and pump £200bn into the economy to fight the coronavirus crisis.
The Bank – headed by new governor Andrew Bailey – cut rates from 0.25 per cent to the lowest level on record yesterday as it repeated its warning that the economic impact of the Covid-19 outbreak could be ‘sharp and large’.
The recovery followed gains by global stock markets overnight in response to an unprecedented wave of stimulus measures, with rate cuts in the US, Canada, Australia, Indonesia and Norway and a £700bn quantitive easing programme by the European Central Bank.
Mr Sunak is set to reveal another huge coronavirus bailout today, including offering to underwrite around £17,000 of every worker’s salary in a bid to help working people and stop businesses being bankrupted by wage bills.
The Bank of England – headed by new governor Andrew Bailey (pictured) – cut rates from 0.25 per cent to the lowest level on record yesterday
Following news of the Bank of England’s interest rate cut yesterday, the FTSE 100 rallied by 1.83 per cent to 5,173 points having fallen nearly 140 points earlier in the day.
It came a day after the pound slumped to a 35-year low against the US dollar after Chancellor Rishi Sunak’s £350billion coronavirus bailout failed to calm the markets.
Recent falls have seen more than half a trillion pounds wiped off the FTSE 100 Index in less than three weeks, with the top flight losing almost 11 per cent of its value last Thursday in the biggest one-day fall since 1987.
The pound is also suffering against the dollar. It has not been this weak since 1985, when the Plaza Accord was signed by the world’s richest nations to weaken the dollar and drag the US economy out of recession.
Sterling has been one of several currencies to tank as investors rush to put their money in US dollars, the world’s most liquid currency and seen as a safe haven in times of crisis.
A graph showing the FTSE’s rise today (right) compared to its performance from November