What’s Going On Here?It’s nice when the Bank Of England (BoE) shows you it cares: the central bank announced on Thursday it’d pump an extra $195 billion into the UK economy. What Does This Mean?The BoE agreed to buy a fresh round of government bonds, which makes this the fourth time since March that it’s flooded the UK economy with cash to give it a boost. And it might not be done yet: the central bank said it’ll take even more action if it needs to.
The announcement came as the BoE lowered its economic growth estimate for the UK: it’s now expecting the economy to shrink 2% this quarter, down from the 5.4% growth it predicted in August. That probably has something to do with the country’s imminent four-week lockdown, but Brexit – yep, Brexit’s still happening – isn’t exactly helping: the BoE warned that unless businesses start preparing, the economy will take another hit next quarter. Why Should I Care?Zooming in: Jobs jobs jobs.
The UK’s mounting job losses – 2,600 more of which came from Lloyds bank and department store chain John Lewis on Thursday – likely influenced the BoE’s decision too. But the BoE might be hoping its new bond-buying measures will help stem the tide: the more money it introduces into the economy, after all, the further the cost of borrowing will fall – which should in theory, help businesses keep ticking along with their workforces intact.
The bigger picture: It’s the economy, stupid.
With the US election still hanging in the balance, America’s central bank opted not to make policy changes at its own meeting on Thursday. It’s previously said it would do whatever it took to help the economy, but that government action was a quicker way to put cash in people’s hands. Uh, about that: the government couldn’t agree on a support package before Tuesday’s election, and it’s anyone’s guess when it ever will. | 