MARKETS CLOSE: Bank of England warns of worst ever recession and holds rates; O2 and Virgin announce mega merger; BA says flights could resume half full
- UK rates kept on hold at 0.1% by the BoE first thing this morning
- Covid-19 crisis means Britain on track for worst recession on record
- It is possible that further measures like quantitative easing could emerge
FTSE 100 closed up 1.4 per cent or 82.22 points at 5,935.98 and the pound was at $1.23 against the dollar.
The Bank of England has warned that Britain faces the worst recession in its history, and suggested the economy will shrink by 14 per cent this year alone.
The Bank’s monetary policy committee voted unanimously to keep interest rates on hold at the dismally low rate of 0.1 per cent, spelling bad news for savers, but potentially better news for borrowers, it the cuts are passed on.
The Bank’s policymakers were less decisive when it came to other stimulus measures. Two of the nine members voted to increase the latest round of quantitative easing by £100billion to £300billion.
Elsewhere, mobile network giants O2 and Virgin have agreed to merge in a mega £31.4billion deal, which looks set to transform the country’s telecoms market.
Meanwhile, British Airways owner IAG says it will take the airline three years to recover from the Covid-19 pandemic, and further restructurings are on the cards.