Bank of England increases Investing.com’s asset purchases

Investing.com – kept the interest rate unchanged at today’s board meeting, but raised the asset purchase from £ 745bn by a further £ 130bn to £ 875bn.

The Committee states that there may be a contraction of the economy in the last quarter of the year and that the increase in the unemployment rate will continue until the first half of 2021 (the unemployment rate is expected to increase to 7.75% in the second quarter of 2021). With less uncertainty, the country’s economy is expected to grow 7.25% in 2021.

The bank’s prominent messages stating that the outlook for the economy hinges on the pandemic and Brexite:

The correct path of monetary policy depends in part on the balance of the effects of the UK’s new trade agreements with the EU on demand, supply and exchange rate,

UK trade and GDP are likely to be affected during the first adjustment period in the first half of next year, as the UK left the single market and customs union as of January 1st.

If inflation prospects weaken, the committee stands ready to take further action, if necessary, to fulfill its mandate.

Consumer spending eased on a number of high-frequency indicators,

The outlook for the economy remains unusually uncertain.

Author: Deniz Engin