BoE: Further measures to mitigate the impact on UK growth – UOB

Lee Sue Ann, Economist at UOB Group, reviewed the latest stimulus package announced by the Bank of England (BoE).

Key Quotes

“The monetary policy committee (MPC) voted unanimously to cut its Bank Rate by 15bps from 0.25% to 0.10%, a record-low. The policy rate had been slashed only a week ago from 0.75% to 0.25%. The latest move also comes less than a week before the next scheduled meeting on 25 March, and days into the tenure of new BOE Governor Andrew Bailey.”

“The MPC voted unanimously to increase the BOE’s bond-buying program to GBP645bn (30% of GDP), up by GBP200bn. Currently, the BOE maintains its government and corporate bond holdings at GBP435bn and GBP10bn respectively. It said “the majority of additional asset purchases would comprise of UK government bonds” and would be “completed as soon as is operationally possible”.

“The BOE announced it was increasing the size of its Term Funding Scheme, targeted at smaller businesses.”