The Bank of England has cut its base rate to a record low of 0.1% as it warned the spread of Covid-19 will result in an economic shock that could be "sharp and large" but also "temporary".

Its rate-setting committee, led by new governor Andrew Bailey, also decided at its special meeting on 19 March to re-start the post-crisis asset purchase programme, also known as quantitative easing.

The Bank said it would increase its holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by £200bn to a total of £645bn, financed by the issuance of central bank reserves.

On March 11, reduced rates from 0.75% to 0.25% in response to the coronavirus outbreak.