Eastbourne Chamber and the Bank of England
We have just received a very complimentary communication from the Bank of England about our feedback to them and to the Monetary Policy Committee which we thought we should share with you:
Thank you for the panel meeting the other day. The intelligence I gathered that day was exceptionally timely and very helpful amongst other business feedback to help inform the policy decisions that have been announced recently.
Given the fast developments over recent days, I thought it would be helpful for me to get in touch. We remain keen to know what is happening to businesses and I would be very happy for you and/or members of the panel to drop me a line about developments should you and/or them wish to do that at any stage until we are due to meet again in June.
I also thought you would welcome seeing the text we have been sending out to many of our Agency contacts. (Below.)
We encourage members to feedback their concerns about their business sector and their individual business so we can pass these on to the Bank of England. As you can see, you can effect interest rates and financial policy by sharing your individual situation with Eastbourne Chamber so we can pass this on.
If you would like to do this please email us here.
Covid-19 and support for businesses
We very much hope that your families and businesses are coping with the various stresses being placed on them during this very difficult time.
The Bank of England is doing what it can, by lowering interest rates and enacting measures to help banks continue to lend to households and businesses.
Other parts of the official sector have also made considerable efforts to ease the impact of coronavirus on the economy and public wellbeing, along with the steps being taken by companies and households themselves.
We, the Bank’s Agents, will do what we can, by continuing to gather intelligence from businesses to help policymakers understand what is going on at ground level. Our usual individual company meetings are continuing, just by telephone instead of face to face.
We quite understand if you are unable to continue to help us stay on top of developments during this challenging period, but if you can spare us your time, we would be hugely grateful.
Any additional feedback/updates that you can provide on what you are experiencing – on supply/demand/credit/whatever is relevant – please send them to us here.
Every contribution will, as usual, be treated as confidential.
In case it is helpful, we have included a bit more detail on the measures announced by the Bank below, along with some links.
Support for businesses: we announced a large package of measures on Wednesday 11 March to help keep firms in business and people in jobs and to help prevent a temporary disruption from causing longer-lasting economic harm. The package was coordinated across the Bank’s areas of responsibility and announced on the same day as the Government’s budget. And on 17th March the Chancellor announced some further measures to support businesses, summarised here.
The most relevant of the Bank’s actions for you included:
- A Bank rate cut of 50bps, to 0.25%
- A term funding scheme for lenders with additional incentives for lending to SMEs. Key features include:
- Four year funding to banks and building societies at or very close to Bank Rate – to help reinforce the transmission of the reduction in Bank Rate.
- The drawdown period will start no later than 27 April and will run for a year.
Please speak to your bank or building society about support.
- A reduction in the countercyclical capital buffer required by lenders which will support up to £190bn of bank lending to businesses, or 13 times banks’ net lending to businesses in 2019. The major banks are well able to withstand severe market disruption – they are already well capitalised and the economic disruption from Covid-19 should have less of an impact on the core banking system than our recent stress tests which the system has withstood.
- We also have market operations in place to make loans in all major currencies on a weekly basis and we have also taken additional steps to support market functioning.
We will continue to play our part in supporting the economy during these difficult times.
The Bank of England