The Pound is up against both the Dollar and the Euro, following the Bank of England’s surprise announcement of a rate cut and support for bank lending. The unexpected decision is clearly targeting the anxiety generated by a sense of inevitability that the coronavirus crisis will trigger a recession. Sterling’s reaction was immediate, albeit not what normal circumstances would have dictated.
The cut of 0.5% on interest rates instead offered support to the currency, the markets see it as a positive for the economy which, combined with other forms of stimulus from the government, will give the country’s economy more of a fighting chance in the face of the greatest economic challenge since the financial crisis of 2008.
