Home / Business / The Bank of England keeps interest rates stable and maintains bond buying levels

The Bank of England keeps interest rates stable and maintains bond buying levels



The Bank of England kept interest rates stable on Thursday and maintained the existing level of asset purchases as investors looked for signs of a slower economic recovery.

The main lending rate was held at 0.1%, with the central bank cutting interest rates from 0.75% twice since the coronavirus pandemic began.

The monetary policy committee unanimously voted against an extension of its bond purchase program after announcing an additional £ 100 billion ($ 131.4 billion) expansion in June that raised the total value of the asset purchase facility to £ 745 billion.

Instead, the central bank will wait to see how much unemployment is likely to rise in the fall. The UK is expected to end its vacation program in October, which has partially subsidized wages for millions of vacation workers during the pandemic.

Economists have suggested that many of these workers are unlikely to get back into the job market. In its Thursday report, the BOE said the unemployment rate is expected to rise to around 7.5% by the end of 2020.

The central bank also said that Britain̵

7;s economic recovery “will depend crucially on the development of the pandemic, measures to protect public health and the response of governments, households and businesses to these factors”.

She reaffirmed that she would continue to monitor the situation and was ready to adjust monetary policy accordingly.

Like many of Europe’s major economies, the UK government has been forced to put some restrictions on travel and social activities in recent weeks, fearing that the number of coronavirus cases may increase again, while a new one has been localized in the Scottish city of Aberdeen Blocking has been announced.

In addition to the pandemic, the UK is also having tense discussions with EU leaders to build a new trade relationship. Should the talks fail, the UK would suddenly step out of its transition period at the end of the year without a trade agreement. This scenario should exacerbate the economic damage caused by the pandemic. The next round of talks is scheduled to begin on August 17.


Source link