The Bank of England has slashed interest rates to help the country battle the coronavirus.

It means interest rates will fall from 0.75 per cent to 0.25 per cent, the first emergency cut in the base rate since the financial crash just over 10 years ago.

The Bank said: "The Bank of England’s role is to help UK businesses and households manage through an economic shock that could prove sharp and large, but should be temporary.

"The Bank’s three policy committees are announcing a comprehensive and timely package of measures to help UK businesses and households bridge across the economic disruption that is likely to be associated with Covid-19.

"These measures will help to keep firms in business and people in jobs and help prevent a temporary disruption from causing longer-lasting economic harm.

"Following the spread of Covid-19, risky asset and commodity prices have fallen sharply, and government bond yields reached all-time lows, consistent with a marked deterioration in risk appetite and in the outlooks for global and UK growth. Indicators of financial market uncertainty have reached extreme levels.

"Although the magnitude of the economic shock from Covid-19 is highly uncertain, activity is likely to weaken materially in the United Kingdom over the coming months.

"Temporary, but significant, disruptions to supply chains and weaker activity could challenge cash flows and increase demand for short-term credit from households and for working capital from companies.

"Such issues are likely to be most acute for smaller businesses.

"This economic shock will affect both demand and supply in the economy."

The rate cut decision was taken at a special meeting of the Monetary Policy Committee which ended yesterday and the vote to cut the bank rate was unanimous.

The MPC also voted unanimously for the bank to introduce a new term funding scheme with additional incentives for small and medium-sized enterprises (TFSME), financed by the issue of central bank reserves.

The bank said the rate cut "will help to support business and consumer confidence at a difficult time, to bolster the cash flows of businesses and households, and to reduce the cost, and to improve the availability, of finance."