The Bank of England cut UK interest rates from 0.75% to 0.25% to support the UK economy in the face of the Corona virus outbreak.
ON speaker The decision was made due to the fact that "the indicators of financial market uncertainty have reached an extreme level".
"Although the extent of the economic shock from Covid-19 is highly uncertain, activity in the UK is likely to weaken significantly over the coming months.
"Temporary, but significant, supply chain disruptions and weaker activity could jeopardize cash flow and increase demand for short-term household loans and corporate working capital.
"Such problems are likely to be most acute for smaller companies. This economic shock will affect both demand and supply in the economy."
The move will take place before the announcement of British Chancellor Rishi Sunak's annual budget on Wednesday afternoon.
Sunak is expected to announce a number of measures to protect companies that are already struggling due to economic confidence in the UK.
Actions that Sunak is expected to announce include a temporary cut in corporate rates and an emergency fund for small businesses.
The Chancellor is also expected to announce an emergency response to the National Health Service in anticipation of a likely coronavirus epidemic in the country.
The Bank of England's decision was surprised by market analysts.
"The timing and size of the move from the Bank of England surprise the markets and appear to be sending a clear message of policy synchronization," said Ranko Berich, head of market analysis at Monex Europe.
Developments come when the corona virus hits the British government itself. Health Minister Nadine Dorries announced Tuesday that she was hit by COVID-19.
Dorries met with Prime Minister Boris Johnson and hundreds of others in Westminster shortly before the virus was diagnosed.