Professionals, carers, Public Health officials, and volunteers across the country, and the exceptional efforts of the sco abroad. U. K. Citizens the bank of englands role is to help households manage through an economic shock that could prove large and sharp, but temporary. That is why the bank is announcing a comprehensive timely package of measures to help u. K. Households and measures bridge across the economic disruption caused by covid19. These measures will keep firms in business and people in jobs, and they will prevent a temporary disruption from causing longer lasting economic harm. Maximizing our response requires ordination across all of the banks coordinating committees. That is why all policy committees are simultaneously theng today, maximizing effectiveness of our response requires working in concert with treasury. Ys that is why we are acting on budget day, when the chancellor will announce a series of government initiatives to support u. K. Households and businesses. Acts rising the effectiveness of our response requires continuity over time, that is why the next governor participated in all our policy meetings and is joining me to help explain our approach. I would note all the decisions of the policy committees were unanimous. Following the spread of covid19 risky assets and Commodity Prices have fallen sharply and Government Bond yields have reached alltime lows consistent with a marked deterioration in Risk Appetite and global and u. K. Growth. Although the magnitude of the economic shock from coronavirus is highly uncertain, activity is likely to weaken material early in their u. K. Over the coming months, temporary but significant disruption to supply chains, and weaker activity could challenge cash flows and increase the demand for shortterm credit for households and working capital from companies. Likely to bere most acute for smaller businesses. This economic shock will affect demand in thed country. That is why we are acting today. Reducing the bankrate, this will support net cash flows during a time in which Economic Activity is likely to be disrupted. The reduction in bankrate will help support confidence at a difficult time to bolster the cash flows of businesses and cash flows and to reduce the cost and improve the availability of finance. When Interest Rates are low it can be difficult for some banks to reduce deposit rates much further which could limit their ability to cut their lending rates. To mitigate these pressures and to maximize the effectiveness of Monetary Policy, the mpc is launching a new Term Funding Scheme with additional incentives for lending to small and Mediumsized Enterprises, socalled tssme. The tssme will provide fouryear 5 ding for banks of at least of participants talk of real economy lending at Interest Rates close to bankrate. Additional funding will be available for firms that increase lending, especially for small and Mediumsized Enterprises. Overall the facility could provide in excess of 100 billion pounds in term funding. The tssme will reduce the thesition of bankrates to real economy to ensure households benefit from the action. It will provide participants ost effective to provide against adverse condition and funding markets. It will incentivize banks to provide credit to businesses and households to bridge through a time of economic disruption and provide additional incentives for banks to support lending to sme countries that typically there the brunt of heightened risk aversion and economic downturn. To andrew to explain the actions of the ftc and prc in his current capacity as a member of both of those committees. Fill the support of banks able to supply credit to bridge this potentially challenging time, they have reduced the cyclical capital buffer rates to 0 . 1 and hadad been at been due to reach 2 by december of this year. Expects to maintain zero rates for 12 months so that any subsequent increase would not 2022 atace until march the latest. Given the resilience of the core Banking System businesses and households should be able to rely on banks to meet their need for credit to bridge through a time of economic disruption. Although the disruption from covid19 should be sharp and large it should be temporary. Such disruption to the economy should have low impacts. Those stress tests demonstrated the banks would be able to continue to lend to households and businesses even while absorbing the effects of substantial and prolonged economic downturns in the u. K. And the global economies, as well as falls in asset prices much larger than experienced in recent weeks. The release of the cyclical capital buffer will support 190 billion pounds of bank lending businesses. That is equivalent to 13 times banks netlist and to businesses in 2019. Together with the new terms funding schemes bank should not face obstacles to providing credit to the u. K. Economy. The ftc will monitor closely the responsive banks to these measures and the Credit Conditions faced by u. K. Households and businesses more generally. Turning to the prudential regulations, the release also reinforces the expectations of the ftc and prc that all elements of banks liquidity and Capital Buffers can be drawn down as necessary to support the economy. The expectation was put out today that banks should not increase bonuses in response to these policy actions. The bankssupervisory team has increased reporting , includingrms managing operational risks resulting from the outbreak of the virus. Major u. K. Bigs are able to withstand severe market disruption. They hold one trillion pounds of liquid assets allowing them to meet their obligations for many months. In response to the material fall in bond yields, Insurance Companies are invited to use the flexibility to recalculate the transitional measures to slew the impact of those regulations to support market functioning. Let me mention one other support that we have in place, which is that the bank of england has operations in place to make loans and all major currencies on a weekly basis. Commercial banks have prepositioned enough collateral with the bank of england to allow them to borrow 300 billion pounds through these facilities. Now i will conclude, the bank of englands actions today comprise a timely and powerful package to support u. K. Businesses and households to bridge a temporarily difficult period and mitigate longerlasting effects on jobs growth and the u. K. Economy. The bank is coordinating its actions with those that the chancellor will announce later today in the budget to ensure our initiatives are complementary and will collectively have maximum impact consistent with our independent responsibilities. The bank will continue to coordinate closely with our international counterparts. The bank will take all necessary further steps to support the u. K. Economy and Financial System consistent with its statutory responsibility. Recall ahing will financial crisis a little more than a decade ago, and then the Financial System was the core of the problem. Now it can be part of the solution. Over the past decade the u. K. Financial system has been transformed. We did not build the strength for its own sake. This is prudence with a purpose, resilience with a reason. That reason is to fulfill the bank of englands mission, namely to support the good of the people of the United Kingdom by maintaining monetary and financial stability. I acting today the bank is insuring the strength of our Financial System can be directed where it is most needed in the months ahead. With that we are welcome to take your questions. One question at a time, please. Francine Andrew Bailey speaking at a press conference after the surprise cut and many more measures. The bank of englands move has gone beyond a simple rate cut focusing on making sure small and Mediumsized Enterprises have enough money. Mark carney with the incoming Andrew Bailey, the next bank of england governor. Lets take a listen. 0 so there is conventional room for the committee. Additional room in all of the committees instruments if it were to choose that. In terms of evidence is very early days and is uncertain. The direction is clear, the orders of magnitude are less clear. Evidence frome is other economies. We have seen what happened in the chinese economy, swinging from north of 5 growth, 5. 5 growth, to likely a contraction in the First Quarter of virtually all of the evidence pointing to that. We have the very early signs in global pmis across a range of economies of a similar shift. Not the same order of magnitude, but directionally moving. We have antidotal evidence we are building up through our direct contacts with businesses where we have seen a sharp fall in trading conditions, particularly in retail, Consumer Discretionary items over the course of, really, the last week, week to 10 days. Prior to that we were seeing supply chains disruptions in the Manufacturing Sector as well. Directionphasize clear, orders of magnitude still to be determined. Also what is clear to all of the committees is that this is a situation that should prove temporary. Part of our job is to make sure the Economic Impacts are temporary so we truly are taking the steps to bridge where we are today to where we should be when this passes. Said is what you just the economic situation, if it deteriorates further in the next couple of weeks, do you imagine the bank of england may have to act again in the march meeting . My second question is why would quantitative easing or quantitative purchases not included today, and would you an important part of the toolkit . Of qe and asset purchases, they are very much part of the banks toolkits. I testified last week it seems like, longer ago . Monetaryament about policy space that we have and in the range of Monetary Policy space i gave in my view that asset purchases can be an important component providing additional firepower for the mpc, for the bank, if that is needed. Why not now . This is a big package. I recognize quite often the focus is on Interest Rates. The easiest to understand is the conventional policy instrument. Shifting a countercyclical buffer to 0 releases a huge 2 to 0 buffer from releases a huge amount, just under 2 billion of Corporate Credit lending capacity, exactly the type of drawdowns that would be required in this type of capacity isnd the 13 times net lending to the entire corporate sector last year in this economy. , big number. Nothe capital side, liquidity, but term funding clarity, probably in excess of 100 billion at bankrate to cross the banking and building society, it is a big, big package. In terms of forwardlooking, i will just note the statements the bank will take all necessary further actions. Here to take all further actions, i will pass to the man the only thing that i would remind is that there is a ritual schedule of meetings the mpc will have later this month. Meaning been a special and a special action, but it doesnt change the schedule. This will be under constant review and consideration. If you all ask two questions youre not all going to get in. Governor, you are talking shock that is both sharp and large. Could we end up seeing a recession this year . Coronavirus is not as temporary as you think . It will pass. Medical situation will pass with time. There will be a vaccine with time. Of the virus will be arrested. We dont know exactly what that. Of time is what that period of time is. The expert epidemiologist talk in scenarios and quite rightly so. We have the resilience in the system that has been built up over a decade that can withstand all of those scenarios. The important thing is to use some of that resilience for the purpose of bridging where we are to where we need to get to. Too early. I apologize to repeat what i we have anway, but sense of the direction, we have a sense of the orders of magnitude. It could the large, but it is a temporary situation. What is important is that a viable business today, or viable businesses of last week, has the resources and can be bridged so they are viable Going Forward and peoples Jobs Associated with those businesses are there. The is how we and government help prevent, and the Financial System itself, the private Financial System, has an Important Role to prevent a difficult temporary situation having longerlasting economic effects. Is another question to the incoming governor. At the select Committee Last week you said you agreed with 250 carney there were basis points of loosening available. How much do you have left . You have to combine two things. What have we done and how have the markets moved in the meantime . It is like the Forward Guidance elements of that is a combination of what we do and what the markets anticipate. I dont want to put an exact number on it, but from what mark said earlier in terms of what is left, probably roughly sort of in the order of just under half. That could move around from day today for the reason i just gave. That means there is more available. Could you explain the effectiveness of lowering boundaries by 1 . Cut is notpoint going to im sorry, i missed the last clause of your question. On the grounds that it didnt . With only 15 basis points to go what is the point of not having done that today rather than delay . A couple of things. A big package. This is a big package. It is a big deal to cut by as they did. It is a huge term funding sector. 100 billion at bankrate with additional incentives that could be substantially increased depending on the lending path of the economy. There are fiscal measures coming. We have direct line of sight of the relevant bits of the budget. That is part of coordination, acting in concert. You have to wait for the end of the day for the whole package. Or until midday is may a better way to put it. The last one is the mpc is in a and ion where it has, very much associate myself with the incoming governors comments, in terms of magnitude policyroom on all of its instruments if it so chooses and it has regularly scheduled meetings and we will take decisions at the appropriate time. To ask if you agree with Christine Lagarde about the risk of as serious as 2008 . It is a different form of shock than 2008. President lagarde knows well, and we have had this discussion, and we lived through 2008 in our previous roles. The core ofstem was the problem in 2008, and it is in a very different place where we can draw on the resources of that. There is no reason for this shock to turn into the experience of 2008, a virtual ift decade in the economies, we handle it well. Isat the bank of england, it the government and private Financial Sector recognizing this has the potential to be and of course, very much those on the frontline, we shouldnt forget the extraordinary work they are doing and how important that is. That is fundamental. Stepping on the economic side, all of us working together, including the private sector, ensuring it is something that doesnt have longerlasting effects. Decade or more led by what mark has done domestically and globally building up the resilience to face a shock. Isnt that what shock is going to be . Is a totallyt different discussion than the one we were having a decade ago, and that is a very good thing. An estimate,give could you express the measures you unveiled today in terms of 2 boost to or gdp, for example . Anyone at the bank have coronavirus and self isolating . The answer to the second is no, but we are taking a series on contingency measures that are fully operational. Three sites for our critical functions rotating critical teams including the governors level. With the deputy governor, with the governor, and ensuring that necessary capacity to take all necessary decisions. In terms of the scale of the stimulus, there are different ways you can size it north of 1 . I say that not least because imagine if we didnt do this in a situation and the signal to banks in the Financial System would be to draw in, conserve your capital. This could be difficult terrain in to rein in. Doneamage that can be there can be significant. Andrew may want to expand on this, it is selfdefeating ultimately, but it is a coordination issue. We have that base in the system, the strong base in the system. Just like quantitative easing is particularly powerful when , using were disruptive the countercyclical buffer when or credithe potential constraints, it is particularly powerful in that situation. As many of you know we are dealing with some of the more painful elements of the consequences of the last crisis with small firms. We dont want that again, thank you. A very clear message to banks, reflected in a number of things banks have already said. Take that into consideration that you have all of the resources and wherewithal to see ,hrough this issue, the shock and to support the economy and businesses. That is a very strong message. You mentioned, governor, potential forebear of what could come. Are you saying we could see similar measures in terms of isolating cities or industries within the u. K. , similar to the lockdown we have seen even in italy this week . The medical strategy, if i can put it that way, those are ultimately decisions for the government advised by experts. It is not for us to comment or speculate on what those could be. Takell say that we dont the premise of your question as what im about to say confirming it, if you will. Directly with those same medical experts to understand the various scenarios in terms of the spread, the potential spread, of the virus. here are different strategies social isolation and protection of groups. We have look