The Bank of England's Monetary Policy Committee (MPC) has agreed to keep interest rates at an all-time low of 0.1% pa but has also agreed an extra £100 billion will be put into the UK’s economy to help recovery from the coronavirus epidemic using quantitative easing.
The Bank's policymakers feel that the coronvirus effect on the economy is less severe than they initially thought from evidence they are receiving and voted 8-1 to increase the size of its bond-buying programme, which is modest compared to the US $1 trillion QE programme announced earlier this week.
The UK economy in April (GDP) fell by 20.4% and official data shows that between March and May the number of UK workers on payrolls dropped by more than 600,000.
The MPC 'minutes' indicate that the economy is starting to bounce back, housing activity has picked up and in May and June consumer spending had started to recover.
It was also reported that recent demand and output data had not been as negative as they thought but it is the potential of the longer lasting effects to the economy from the pandemic that they are trying to 'head off' with the extra £1bn QE stimulus.