During a special meeting, the Monetary Policy Committee also agreed to take further action by increasing the BoE’s holdings of UK government and corporate bonds by £200bn to a total of £645bn.

Industry reaction

Sam Harhat, head of financial services at Andrews Property Group, said: “The message the Bank of England wants to give consumers and businesses through Thursday’s historic action is simple: we’ve got your back.

“Through countless monetary and fiscal measures, the Bank of England and the government are throwing the kitchen sink at the economy in an effort to bridge it across the peak phase of the pandemic.”

However, Sam stated that it was “hard to predict” how the measures would impact the financial market.

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John Goodall, CEO at Landbay, claimed that the £200bn bond buying programme was more relevant than the interest rate cut.

“…It is basically printing money again, [but] this is more likely to push the cost of borrowing down, although I suspect the Bank will need a lot more than £200bn.

“What will make the biggest difference now are fiscal measures, such as grants for businesses and other steps to help to maintain employment levels.”

Miles Robinson, head of mortgages at Trussle, was unsure how the interest rate reduction would affect the mortgage market.

He added that the spread of Covid-19 and the measures taken to contain the outbreak were resulting in an “economic shock”.

“We’re in changing economic waters and the situation is evolving constantly.”

Tomer Aboody, director at MT Finance, commented that it was more hopeful of a possible stamp duty cut within the next few months “in order to stimulate the property market and encourage new borrowers”.