Our response to coronavirus (Covid)

During the Covid crisis, we acted to save jobs and support the economy.

We put in place a package of measures to help keep firms in business and people in jobs, and help minimise the longer-term damage to the economy.

We worked closely with HM Government ensure that our responses had maximum impact.

You can find details of Government support for people and businesses in the related links section.

We cut our interest rate to 0.1%

At a special Monetary Policy Committee meeting on 19 March 2020, we cut our interest rate (we call it Bank Rate). Bank Rate is the UK’s official interest rate. It is the single most important interest rate in the UK, as it acts as a reference, or ‘base’ rate, for all sorts of other financial products.

Lower interest rates will mean cheaper loans for businesses and households. That will reduce the costs faced by businesses and households in the UK.

We are helping banks to cut interest rates on their lending

We’re offering banks and building societies long-term funding at interest rates at, or close to, 0.1%. This will reduce the interest rates they charge you.

More funding will be given to banks that increase their lending. And we are providing additional support to banks that offer more lending to small and medium-sized companies. These firms often need more support in difficult economic times.

We helped businesses pay their staff and suppliers

We worked closely with the Government to support large businesses by offering them cash for their corporate debt. This helped them to keep paying wages and their suppliers.

And it meant banks and building societies could use the funding help we gave them to focus on supporting small and medium-sized companies.

We helped banks to expand lending

We reduced the amount of financial resources (called capital) that banks and building societies needed to set against their lending to UK businesses and households.

UK banks agreed not to pay any dividends to their shareholders in 2020. We published guidance for banks on dividends relating to their full-year 2020 results. 

For dividends relating to 2021 results, prudent dividends can be accrued but not paid out. 

In addition, we expect banks to be cautious and prudent when paying any cash bonuses to their senior staff.

We let firms focus on you by temporarily reducing the regulatory burden we placed on them.

Find out more 

Read a summary of our latest Monetary Policy Report to find out what we have been doing more recently.


This page was last updated 31 January 2023