The Bank of England (BoE) has announced it will put an extra £150 billion into the UK economy as England begins a second lockdown.
In its latest report on the UK’s economic outlook, the Bank’s monetary policy committee (MPC) warned there are signs that consumer spending has softened across a range of high-frequency indicators, while investment intentions have “remained weak”.
The Bank revealed that the MPC agreed to print an extra £150 billion, which will extend its asset purchase scheme to £875 billion.
The BoE expects GDP to decline in the final few months of the year, before picking up alongside household spending in Q1 2021, as restrictions loosen.
The MPC kept interest rates on hold at 0.1%.
The BoE said the extended coronavirus job retention scheme and new job support scheme will “mitigate significantly the impact of weaker economic activity on the labour market”.
The report added:
“The outlook for the economy remains unusually uncertain.
“It depends on the evolution of the pandemic and measures taken to protect public health, as well as the nature of, and transition to, the new trading arrangements between the European Union and the United Kingdom.
“It also depends on the responses of households, businesses and financial markets to these developments.”
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