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

BoE keeps benchmark interest rate at 0.1% as it increases bond purchase programme

The Bank of England 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.

The Bank of England 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.

 

The Bank of England increased its bond-buying programme by £100 billion on Thursday 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, with only the bank’s chief economist Andy Haldane voting for no increase.

All nine members voted to keep the benchmark 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 bank 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