Search

Bank of England Increases QE Program; Holds Key Rate at 0.1%


The Bank of England became the second major central bank this week to inject fresh monetary stimulus into a weakening economy, increasing its bond-buying program by 150 billion pounds to 875 billion pounds. However, it kept its key interest rate unchanged at 0.1%, despite having examined the possibility of cutting it to zero or even below in recent weeks.


The move is a response to the sharp slowdown in the U.K. economy coming from the second wave of the Covid-19 pandemic. The country recorded nearly 500 deaths - the most since May - and over 25,000 new cases of the coronavirus on Wednesday.


The Bank said it expects gross domestic product to contract again in the fourth quarter, having rebounded in the summer from the initial Covid-19 blow. It also expects GDP in the first quarter to be "materially lower" than it was in the quarter before the pandemic erupted.

"Since the Committee’s previous meeting, there has been a rapid rise in rates of Covid infection," the Bank said in a statement. "The U.K. Government and devolved administrations have responded by increasing the severity of Covid restrictions. All restrictions announced up to and including 31 October have been reflected in the Committee’s judgements."


The pound rose by around a quarter of a cent on the news. By 2:08 AM ET (0708 GMT), it was at $1.2971, up from $1.2946 immediately before the decision. 

3 views
  • Instagram
  • Facebook
  • Twitter
  • LinkedIn

Caution: Trading involves the possibility of financial loss. Only trade with money that you are prepared to lose, you must recognise that for factors outside your control you may lose all of the money in your trading account. TheForexCentre Ltd and its representatives take no responsibility for loss incurred as a result of trading. By signing up as a member you acknowledge that we are not providing financial advice. We have no knowledge on the level of money you are trading with or the level of risk you are taking with each trade. You must make your own financial decisions, we take no responsibility for money made or lost as a result of advice on Forex related products on this website. 

TheForexCentre Ltd and its representatives are not responsible for your actions. You are solely responsible for your own moves and decisions and the evaluation and use of our products and services should be based on your own due diligence. You agree that TheForexCentre Ltd and its representative's programs are not liable to you in any way for your results in using our products and services.

 

We are not financial advisers. ​​

RISK DISCLAIMER

© 2018-2020 TheForexCentre Ltd. All Rights Reserved