Bank of England announces 150 bln pounds extra cash stimulus with 0.1 pct rate unchanged
Source: Xinhua | 2020-11-06
In a bid to sustain growth and employment amid the COVID-19 pandemic, the Bank of England, Britain's central bank, on Thursday unveiled an extra 150 billion pounds (about 196 billion U.S. dollars) in cash stimulus and maintained its interest rate at 0.1 percent.
Financed by the issuance of central bank reserves, the additional 150 billion pounds (about 196 billion dollars) will take the total stock of government bond purchases to 875 billion pounds (around 1,143 billion dollars), said the bank in its quarterly Monetary Policy Report.
The injection of cash into the economy by the bank came as England enters its second lockdown since the start of the pandemic in the country and amid a weakening in the broader economy.
Andrew Bailey, governor of the of the Bank's Monetary Policy Committee (MPC), told Sky News about "twin threats" to growth from renewed coronavirus lockdowns and Brexit disruption.
According to the bank, the pandemic "will weigh on near-term spending to a greater extent than projected in the August Report, leading to a decline in GDP in 2020 Q4 (Fourth Quarter)."
Meanwhile, the unemployment rate is expected to "peak at around 7.45 percent in 2021 Q2 (Second Quarter)", said the report.
In addition, given Britain is set to leave the European Union's single market and customs union on Jan. 1 next year and move "immediately to a free trade agreement" with the regional block, the bank forecast that "UK trade and GDP are also likely to be affected during an initial period of adjustment, over the first half of next year."
In terms of the inflation rate, the bank said that it is expected to "remain at, or just above, 0.5 percent during most of the winter", adding that "inflation is projected to be 2 percent in two years' time" with conditioned prevailing asset prices.
The committee didn't mention the negative rate in its report.
The report was released as Britain recorded another 25,177 coronavirus cases with 492 deaths on Wednesday, official data revealed.
To bring life back to normal, countries, such as Britain, China, Russia and the United States, are racing against time to develop coronavirus vaccines.
Busiunion
Busiunion