Bank of England rebuilds stimulus war-chest with an extra £100b

A general view of The Bank of England and the Royal Exchange as the spread of the coronavirus disease continues, in London, Britain, March 19, 2020. — Reuters pic
A general view of The Bank of England and the Royal Exchange as the spread of the coronavirus disease continues, in London, Britain, March 19, 2020. — Reuters pic

LONDON, June 18 — The Bank of England increased its bond-buying programme by £100 billion (RM536 billion) today as it sought to help steer the economy away from a record slump in March and April caused by the coronavirus lockdown.

The BoE kept its benchmark interest rate at 0.1 per cent.

Eight members of the nine-strong Monetary Policy Committee voted to increase the bond purchase programme while BoE Chief Economist Andy Haldane voted for no increase.

All nine members voted to keep Bank Rate unchanged.

The central bank said it would spend all the extra £100 billion on government bonds but would slow the pace of its purchases, saying it expected the new total £745 billion  target would be hit by the end of the year.

A Reuters poll of economists had pointed to a £100 billion increase in the asset purchase programme and Bank Rate remaining at 0.1 per cent.

The BoE is using its bond-buying programme as its main policy tool as it tries to help steer Britain's economy away from a record 25 per cent slump in March and April.

There was no mention of the negative interest rates — an option the central bank has said it will consider — in the minutes of the BoE's policy meeting. — Reuters

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