Left Menu
Development News Edition

Bank of England, UK to signal more radical action against coronavirus slump

Reuters | London | Updated: 26-03-2020 14:27 IST | Created: 26-03-2020 14:14 IST
Bank of England, UK to signal more radical action against coronavirus slump
Representative Image Image Credit: Wikimedia

The Bank of England is expected to say on Thursday that it is ready to take further radical action to prop up the economy and Britain's finance minister will announce help for self-employed workers hit by the coronavirus shutdown. The BoE, which has made two emergency cuts to interest rates this month, boosted its bond-buying program by a further 9% of British economic output, and taken a string of other measures to help to lend, is likely to hold off on further action when it makes a statement at 1200 GMT after its scheduled March meeting.

But Governor Andrew Bailey, who has been in the job for less than two weeks, and his fellow top BoE officials are likely to say they will take further radical measures - probably another increase in their quantitative easing program - if needed to steer Britain's economy out of its expected slump. This week, the U.S. Federal Reserve took the unprecedented step of saying it will expand its asset purchases by as much as needed to stabilize frantic financial markets.

"Our guess is... that no further purchases will be announced tomorrow," JPMorgan economist Allan Monks said in a note to clients on Wednesday. "But we think the BoE will end up announcing additional asset purchases by the May meeting, especially if it becomes clear that the fiscal deficit is likely to exceed 10% of GDP as we suspect."

Bailey and other BoE officials have suggested they will not cut their benchmark lending rate from its new all-time low of 0.1% into negative territory because it would hurt lending. The BoE ad other top regulators announced a welter of measures on Thursday to give banks more leeway for handling troubled loans.

Shortly after the central bank's announcement, finance minister Rishi Sunak is expected to explain how he plans to support Britain's 5 million self-employed workers through the crisis. On Wednesday, officials said nearly half a million people filed welfare claims over the previous nine days, raising fears of a big jump in unemployment.

Last week, Sunak took the historic step of announcing that the British state would pay 80% of the wages of private-sector workers, who number around 28 million, in a bid to reduce an expected surge in unemployment. He has unveiled a string of other huge, debt-funded stimulus measures. But the 39-year-old former Goldman Sachs analyst has faced criticism that uncertainty about how the government will help the self-employed has left many independent workers with little choice but to ignore calls to stay at home.

The Times reported that Sunak planned to help around 2 million self-employed by paying money directly into their bank accounts. The monthly payouts were expected to be capped and targeted for those on lower incomes, it said. The scale of the hit to the economy - some forecasters are warning of the deepest recession in a century - and prolonged uncertainty about how long the shutdown will last mean further action is likely ahead.

"UK policymakers have launched massive fiscal and monetary support which will help enormously," said Brian Hilliard, an economist with SocGen. "But we fear that the damage is so great, and still mounting, that more measures will be necessary - and in a matter of days, not weeks."



Rethinking Rural Livelihoods in the Times of COVID-19

The reverse migration caused by COVID 19 pandemic has put an additional burden of about one crore people on Indian villages particularly in the states of Uttar Pradesh, Bihar, Bengal and Odisha. Besides increasing the risk of spreading the ...

‘Discounted Deaths’ and COVID 19: Anthropology of Death and Emotions

Death is a social event rather than the mere cessation of biological functions. As seen by anthropologists, death is not just physical but intensely social, cultural, and political....

Indigenous knowledge of communities a must for maximizing impact of community work

Generally, it has been observed that the majority of the academicians in higher education institutions neglect the wisdom of community people and throw their weight around thinking that they know everything and the community knows nothing. ...

In rebuking FBR, Pakistan’s courts take a stand for public health

The system, if implemented effectively, will allow Pakistans revenue service to combat the illicit trade in tobacco products and potentially add hundreds of millions of dollars to the states budget each year. ...


Latest News

Want filmmakers to trust me with different characters: Jaideep Ahlawat

Unreal, amazing and totally surprising, is how Jaideep Ahlawat describes life post his breakout show Paatal Lok. The actor hopes the Amazon Prime Video series will open more avenues for him to break stereotypes with challenging roles. Wr...

Midnight cowboy steak: French restaurant re-opens after lockdown

The steak restaurant that Jean-Pierre Le Bot co-owns in the French city of Nantes had been shut for 11 weeks, so when officials gave the go-ahead for it to open on Tuesday, he was not going to wait a moment longer than needed.When the clock...

Suzuki Motorcycle launches online sales, service platform

Suzuki Motorcycle India Pvt Ltd SMIPL on Tuesday launched its online sales and service platform through Suzuki at your doorstep programme to meet customer demand during and post COVID-19 lockdown. Suzuki at your doorstep programme will be i...

'Far from complete': UK stats watchdog says of COVID-19 test data

Britains statistics regulator chided the government on Tuesday for publishing data on coronavirus tests that it said were far from complete and comprehensible.The aim seems to be to show the largest possible number of tests, even at the exp...

Give Feedback