The Bank of England has unveiled another big stimulus for the UK economy as it tries to limit the scale of the coronavirus recession, which has already resulted in 18 years of growth wiped out in a matter of just two months.
In a statement Thursday, the bank’s policymaking panel said it was increasing its government bond-buying program by a further 100 billion pounds (USD 125 billion) despite signs that the second-quarter fall in economic output will be less severe than it had thought last month.
The bank warned then that the UK economy could shrink by 25 percent between April and June, from the previous three-month period.
There are two motivations behind the bank’s purchase of government bonds from investors, such as pension funds and other investors, to keep a lid on interest rates for such things as home mortgages and loans, and to keep money flowing through the financial system in a time of acute stress.
The bank’s monetary policy committee opted against cutting its main interest rate, even into negative territory, its main interest rate was left at 0.1 percent, the lowest in the bank’s 326-year history.
Read Today's News TODAY... on our Telegram Channel click here to join and receive all the latest updates t.me/thetimeskuwait
