The Bank of England is soon to introduce another aid package to the United Kingdom.
It is another program for the purchase of bonds in the amount of at least £ 100 billion or $ 127 billion dollars.
Apparently, the central bank will join its colleagues from around the world, including the US Federal Reserve.
However, interest rates will not decrease, as committee members voted 8 to 1 in the retention of 0.1% interest rate, as well as on the continuation of the existing 200-billion pound bond purchase program which allows the central bank to purchase government bonds, corporate investment-grade bonds, and non-financial bonds. The target of the Bank is to achieve 2% inflation, so it uses all available tools to support growth and employment.
Meanwhile, despite the fact that the UK has lifted most of the quarantine restrictions, the British economy is still under one of the deepest recessions, in which a significant increase in unemployment is observed. Last month, the Bank announced that the current recession is the worst observed since 1706.
Thus, in addition to support provided by the central bank, the British government is also preparing another package to help the economy, which includes lowering sales taxes and financing major transportation and green projects.
At the moment, there are already a bunch of extremely expensive support programs to support the economy such as the limitation of lay-offs in the country.
"The growing risk of unemployment, which is increasing during the summer, emphasizes that the economy is unlikely to return to its previous size in the near future," said James Smith, market economist at ING.
The UK also faces economic risks because of its historic decision to leave the European Union in January.
This means that the prospects for the country, as well as the global economy are currently uncertain.
