LONDON, March 11 — London stocks climbed today after the Bank of England joined other major central banks in cutting interest rates to buffer the economy from the fast-spreading coronavirus.

Housebuilders — particularly sensitive to the domestic economy — led gains on the STOXX 600, with Taylor Wimpey, Berkeley and Persimmon all up about 4 per cent.

The banking index rose 2.4 per cent, with shares in Lloyds Banking Group, Barclays and Royal Bank of Scotland adding between 1 per cent and 2 per cent.

The central bank cut rates by 50 basis points to 0.25 per cent, following a similar move from the US Federal Reserve last week and said lenders in the country could tap special capital reserves to keep lending to businesses and households.

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“This is the type of policy co-ordination that the market was actually looking for,” said Stefan Koopman, senior market economist at RaboResearch.

“We have a combination of lower interest rates, credit easing measures and most likely a ramp up in fiscal spending, which will be announced later today.”

The FTSE 100 gained 1 per cent, recovering from a four-day slump fuelled by concerns about the fast-spreading virus and a rout in oil markets.

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The central bank’s move came ahead of the unveiling of the first budget of Prime Minister Boris Johnson’s government at 1230 GMT, and the new Finance Minister Rishi Sunak is expected to pledge billions of pounds to fight the fall-out from the coronavirus.

Yesterday, Junior Health Minister Nadine Dorries tested positive for coronavirus, which has so far infected 373 people and killed six in Britain.

Despite Wednesday’s gains, the FTSE 100 is still down more than 20 per cent from its January peak as the outbreak takes a huge toll on the travel industry and disrupts business operations.

Infrastructure group Balfour Beatty rose 10.1 per cent, biggest gainer among midcaps as the company posted strong earnings and order book for 2019.

G4S, one of the world’s largest private security firms, fell 18.5 per cent after posting an annual statutory loss as it took a charge related to its UK cash business.

Car dealership Lookers sank 19.2 per cent after it identified potentially fraudulent transactions in one of its operating divisions and postponed its annual results until the second half of April. — Reuters