20th March 2020 LONDON (EconoStream) - In an emergency meeting on Thursday to respond to the economic fallout from the coronavirus pandemic, the Bank of England’s Monetary Policy Committee decided unanimously to cut the BOE’s key bank rate by 15 basis points to an all-time low of 0.1% and to expand by £200 billion its bond holdings. The decisions were described in a statement issued by the BOE as being meant to counter an “economic shock that could be sharp and large, but should be temporary.” The worsening of the economic outlook had led to deteriorated conditions in the UK gilt market, the BOE noted, leading to a tightening of financial conditions. Though the additional asset purchases would include sterling non-financial investment-grade corporate bonds, the focus would be on UK sovereign debt, the BOE said. The purchases would be made as soon as possible, “consistent with improved market functioning,” according to the statement, with further market guidance coming “in due course.” In addition to the asset buys and interest rate cut, the MPC unanimously decided to expand the BOE’s recently announced term funding scheme with additional incentives for SMEs (TFSME). The TFSME encourages lending to the real economy by offering four-year loans at or close to the bank rate, with built-in incentives based on the degree to which the banks lend out the money as hoped, in particular to small- and medium-sized businesses. The BOE noted that the next regular meeting of the MPC would conclude on March 25 and that the minutes from that meeting and the emergency meeting to be published together the following day.