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18 June 2020

Bank of England announces £100bn stimulus

James Rowbury, Investment Research Coordinator, Redmayne Bentley

Today, the Bank of England’s (BoE’s) Monetary Policy Committee decided to hold interest rates at 0.1%, a much-needed initiative to support growth and spending in the economy while maintaining a low cost of borrowing for the UK Treasury to fund their pandemic policy response spending.

In coordination with its global counterparts, the BoE issued a further bond-buying programme of £100bn, taking the total stock asset purchases to £745bn. Comforting for investors and businesses alike, the additional liquidity provides a much-needed flow of capital into investment markets.

The move, it is hoped, will stoke up appetite to deploy money to companies seeking financial support from their investors as they grapple with the burden of lockdown restrictions during the second quarter of this year. 

In a positive turn from May, this month’s report stated that the latest data signals a stronger recovery than expected, with payment data consistent with a recovery of consumer spending, though caution should be heeded given the material uncertainty still facing the economy - inflation has fallen to just a third of what it was before the pandemic.


 
Bank of England announces £100bn stimulus
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