The Bank of England has increased its monetary stimulus by a bigger than anticipated ￡150 billion (US$195 billion) as it tries to boost the economy amid new lockdown measures.
In a statement released yesterday, the central bank’s Monetary Policy Committee said that its challenge is to respond to the economic and financial impact of the resurgence of COVID-19, which has led to the reimposition of widespread restrictions across the UK.
A four-week lockdown began yesterday in England that will keep closed all shops selling items deemed to be non-essential, such as books and clothes, as the government seeks to contain a sharp increase in infections.
Photo: EPA-EFE
The other nations of the UK — Scotland, Wales and Northern Ireland — have also announced wide-ranging restrictions on economic activity.
The latest restrictions will batter an economy that had been just recovering from the sharp recession caused by a spring lockdown.
As a result, the Bank of England was widely expected to respond to the changed economic backdrop.
However, the increase in the bond-buying program is bigger than the ￡100 billion anticipated in financial markets.
The stimulus is aimed at keeping a lid on borrowing rates across the economy to boost lending as well as ensuring that money keeps flowing through the financial system.
The committee also kept its main interest rate unchanged at the record low of 0.1 percent.
The bank said that Britain’s economy would shrink by 11 percent this year, more severe than the 9.5 percent contraction it forecast in August.
GDP is likely to grow by 7.25 percent next year, weaker than a previous forecast of a 9 percent bounce-back, it said.
Britain’s economy, which as well as COVID-19 is facing the risk of a trade shock when its post-Brexit transition with the EU expires on Dec. 31, has been supported by a surge in debt-fueled spending by the government.
Despite the spending, Britain faces the sharpest peak-to-trough contraction of any G20 economy, Moody’s said on Oct. 16 when it cut Britain’s credit rating.
Additional reporting by Reuters
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
Japan approved ￥631.5 billion (US$3.97 billion) in additional subsidies to hasten Rapidus Corp’s entry into the high-stakes artificial intelligence (AI) chipmaking arena, ramping up support for a project widely regarded as a long shot. The capital is intended to bankroll Rapidus’ work for information technology firm Fujitsu Ltd, one of the initial customers that Tokyo hopes would get the signature endeavor off the ground. The new money raises the fees and investments that the government is injecting into the start-up to ￥2.6 trillion by the end of the current fiscal year to March next year, the Japanese Ministry of Economy, Trade and
RSS