Would cutting interest rates really help the UK economy deal with a coronavirus pandemic?

It might satisfy financial traders in the City of London but would it help, say, market traders on high streets around Britain? Ben Chu looks into the question

(Reuters)

America’s Federal Reserve has gone big in response to the coronavirus outbreak. A half percentage point cut in the Fed’s interest rate is the largest single reduction in the cost of borrowing implemented by the US central bank since those frantic days some 12 years ago when it seemed like the financial world might be about to end.

Now eyes turn to the Old Lady of Threadneedle Street for her turn to show and tell. Financial markets are now pricing in a cut in interest rates from the Bank of England’s interest rate from their current level of 0.75 per cent.

And many expect the reduction to come well before the next scheduled meeting of the Bank’s rate-setting Monetary Policy Committee on 26 March, possibly even before Mark Carney leaves as Governor and hands over to Andrew Bailey on 16 March.