The Bank of England has cut interest rates back to a record low of 0.25% in response to the economic impact of the coronavirus.
Mark Carney, the outgoing governor of the Bank of England, said that while the impact of the virus on the UK was as yet unclear, evidence of the impact on the China had already suggested that the economy’s “direction is clear”.
Announcing the interest rate drop from 0.75% ahead of the first budget to be announced by the new Chancellor, Rishi Sunak, at the House of Commons, Carney said this morning (March 11) that policymakers had seen a "sharp fall in trading conditions", including spending on non-essential goods.
Carney said that the move would hopefully free up billions of pounds of extra lending power to help banks support UK businesses.
He said: "The Bank of England's role is to help UK businesses and households manage through an economic shock that could prove large and sharp, but should be temporary.”
Six people have now died from coronavirus in the UK, with 382 reported cases.
As AM reported last month, car retailers in China – the world’s biggest new car market – were hit hard by the effects of the virus in February.
In the first half of last month the car retail sector suffered a 92% decline in business during the first half of February, the month eventually ending over 80% down.
In Cox Automotive’s monthly Market Tracker report, which was published by AM today, Philip Nothard, customer insight and strategy director for Cox Automotive, said that coronavirus was among a series of “significant challenges” facing the automotive retail sector.
However, he added: “No one could have predicted the specifics of the coronavirus, or exact environmental policy announcements.”