By Jason Douglas and Paul Hannon
LONDON--The Bank of England kept policy on hold Thursday after an emergency cut to interest rates last week, and said it is prepared to increase the size of its bond-buying program if needed to support the U.K. economy during the coronavirus crisis.
The BOE said in a statement Thursday that its Monetary Policy Committee decided to keep the benchmark rate at 0.1% and to press ahead with 200 billion pounds ($236.58 billion) of asset purchases also agreed last week.
Officials said they expect "a sharp reduction in activity" as a result of the pandemic and the measures the government has taken to contain it. Britons have been ordered to stay at home and schools and businesses have shut.
"If needed, the MPC can expand asset purchases further," the panel said.
The Federal Reserve on Monday said it would buy an unlimited amount of Treasuries and announced new lending facilities to unclog credit markets and lend directly to American businesses.
The European Central Bank has said it will buy 750 billion euros ($816 billion) of public- and private-sector assets at least through the end of the year, and possibly beyond, under a program dubbed the Pandemic Emergency Purchase Program.
The BOE, under new governor Andrew Bailey, has also fired up a variety of lending programs to keep banks flushed with cash and able to lend to stricken businesses. It said it would lend directly to big firms by buying commercial paper.
The scale of major central banks' response to the global pandemic exceeds the actions taken in response to the financial crisis a decade ago, highlighting the scale of the economic cost wrought by the deadly pathogen and government's desperate efforts to contain it.
The Senate on Tuesday passed a $2 trillion stimulus package to help the U.S. economy weather the crisis. Governments in Europe, including in the U.K., France and Germany, have also pledged vast sums to aid struggling businesses and workers.
Write to Jason Douglas at firstname.lastname@example.org and Paul Hannon at email@example.com
(END) Dow Jones Newswires
March 26, 2020 08:33 ET (12:33 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.