FTSE opens up 5% after historic rate cut

FTSE opens up 5% after historic rate cut

The UK's blue chip index rose almost 5% this morning (March 20) following the central bank’s historic interest rate cut and in anticipation of further rescue measures by the government.

The FTSE 100 bounced up 4.8 per cent when markets opened at 8am, but have since fallen back to a daily rise so far of 3.3 per cent.

It follows the Bank of England's base rate cut to a record low of 0.1 per cent yesterday (March 19) in an attempt to boost the UK economy amid the spreading coronavirus crisis.

It was the second cut in interest rates in just over a week after the BoE reduced rates from 0.75 per cent to 0.25 per cent last Wednesday (March 11).

The central bank also announced it would buy a further £200bn of UK government and company debt.

The BoE’s decision comes as governments and central banks across the globe announce monetary and fiscal stimulus to battle the economic impact of the coronavirus pandemic.

Earlier this week chancellor of the exchequer Rishi Sunak revealed a £350bn coronavirus warchest to help businesses and households bridge any economic downturn caused by the crisis.

He is expected to announce further measures today in the form of a rescue package to help British companies retain staff and stay open throughout the pandemic, which could last months.

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