The Monetary Policy Committee at its ending meeting on 10 March voted to cut Bank Rate to 0.25% and introduce a new Term Funding Scheme with incentives for SMEs.
The Governor invited the Committee to vote on the propositions that:
- Bank Rate should be reduced by 50 basis points to 0.25%;
- The Bank of England should introduce a Term Funding scheme with additional incentives for Small and Medium-sized Enterprises, financed by the issuance of central bank reserves, that would: help reinforce the transmission of the reduction in Bank Rate; provide participants with a cost-effective funding backstop; and incentivise banks to provide credit to bridge economic disruption, particularly to SMEs by providing an additional five pounds of funding for every pound of positive net lending to them;
- The Bank of England should maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £10 billion;
- The Bank of England should maintain the stock of UK government bond purchases, financed by the issuance of central bank reserves, at £435 billion.
The Committee voted unanimously in favour of all four propositions.
