GOVERNOR of the Bank of England, Mark Carney, has warned today that the economic shock from coronavirus could "prove large".

He stressed that though the effects could be severe, the effect will "ultimately be temporary".

He reassured that the Bank of England is ready to help businesses and households deal with the consequences of the Coronavirus spread.

He said: "The Bank will take all necessary steps to support the UK economy and financial system, consistent with its statutory responsibilities."

He added that the Bank is monitoring the situation carefully and ensuring that "all necessary contingency plans are in place".

To follow all the latest updates on the coronavirus spread, see our live blog here.

Carney has been reassuring markets with updates on the Bank of England's activities to ease any economic consequences from the coronavirus.

He said that the Monetary Policy Committee (MPC) is assessing the economic impacts and considering the policy implications of various possible scenarios.

One of the things it is looking at is the extent of the impact of supply disruptions.

Meanwhile, The Financial Policy Committee (FPC) is examining macro-financial impacts including spillovers to market functioning and how to address any possible constraints on financing to UK businesses and households that might emerge.

Carney said: "The FPC, MPC and PRC (Prudential Regulation Committee) met jointly yesterday to review a range of macroeconomic and financial system scenarios and their implications, and they will continue to meet as needed and will act as appropriate."

He also said that he has been regularly meeting with the Chancellor of the Exchequer, Rishi Sunak, and is also working with the Treasury and the FCA.

He said: "We are in frequent contact with our international peers, including at the G7, G20 and IMF."

Policymakers in the US introduce emergency rate slash to protect economy

In America policymakers have taken the decision to slash interest rates by half a per cent to fight the economic impacts of Coronavirus.

The emergency measures came as an unexpected shock, but will reassure markets in the US.

This is the fourth time the Federal Reserve System has cut rates since last June.

The Fed said: "The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity.

"In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate by half a percentage point, to 1 to 1.25 per cent.

"The Committee is closely monitoring developments and their implications for the economic outlook and will use its tools and act as appropriate to support the economy."

Cutting rates is another tool available to Mark Carney and the Bank of England if they decide it is necessary to protect the UK economy.

How could the coronavirus outbreak affect me?

Food shopping 

Brits could find grocery shopping tricky as some consumers' panic buying has lead to a few empty shelves in supermarkets.

Delivery could prove frustrating too as people are booking out delivery slots to stock up on essentials.

At the moment, just in time deliveries mean that the supermarkets are staying on top of demand.

But if panic buying and stockpiling increases, stores could start feeling the strain.

Fortunately, grocery stores have plans to deal with disruption.

These could see supermarkets work with suppliers to cut back on variety – focusing instead on their supplies of staple products.

The army could also be called in if there is an acute food shortage.

Andrew Opie, director of food & sustainability at the British Retail Consortium, said: “Disruption to supply chains has been limited, and the availability of products remains good

"Retailers are working closely with their suppliers and monitoring consumer behaviour to anticipate changes in future demand.”

Petrol prices

Drivers should see petrol prices drop as Coronavirus is cutting global demands for oil.

The outbreak in China led to a sudden drop in oil prices as people restricted travel plans.

UK supermarkets don't always pass on oil price drops to consumers, but petrol costs were dropped twice last month.

In fact, February saw some of the biggest monthly reductions seen since the start of 2000, according to data from RAC Fuel Watch.

But experts are warning that a possible emergency OPEC meeting could spell the end of falling prices.

RAC fuel spokesman Simon Williams said: "The oil price has slumped due to the spread of the coronavirus prompting fears of slower global demand.

"This may well lead to a move from oil producer group OPEC and its allies to restrict production when they stage an extraordinary meeting in Vienna on Friday.

"If they decide to take action to prop up the barrel price it would very likely put an end to falling forecourt fuel prices.”

Holidays

Would-be holidaymakers may find they are stuck at home as governments continue restrict travel.

If you've got a holiday planned, it's critical to get insurance now as the virus continues to spread.

It won't help you if you just decide you don't fancy travelling anymore, but it protects you if an area is declared 'at risk' by the Foreign and Commonwealth Office.

Read our full coronavirus holiday cancellations guide for more information.

MORE ON MONEY NEWS

Exchange rates

Coronavirus is causing plenty of volatility in the stock markets at the moment, which also impacts how currencies are doing.

Travellers who watch wisely could get a fantastic deal on holiday money, but equally buying last minute at the airport could cost you dearly.

You can set up alerts to exchange cash when rates move in your favour.

High street

Some high street names have warned of potential shortages due to coronavirus.

Stores including Asos, B&M and Primark rely heavily on supply from China, where large numbers of factories have been shut down.

Apple also warned it's expecting a sales hit after its supply chain was affected by coronavirus.

And Halfords imports “most of its products” from Asia.

Richard Ballantyne, chief executive of the British Ports Association, told The Sun there's expected to be six million fewer shipments between China and the rest of the globe in the first three months of this year.

This could mean higher shipping costs, increased product costs and potential shortages, all of which could be passed onto consumers.

Savers and invetors

The FTSE 100 has risen two per cent this morning as markets begin to recover from coronavirus panic.

But anyone invested in a pension or stocks and shares ISA may have looked on in horror last week as rates plummeted.

Experts are warning savers to sit tight, rather than pulling money from investments and securing the loss.

In fact, now is a good time to invest while markets are relatively low.

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