Bank of England rebuilds stimulus war-chest with an extra 100 bln pounds


Posted at Jun 18 2020 08:29 PM

Bank of England rebuilds stimulus war-chest with an extra 100 bln pounds 1
The Bank of England and the Royal Exchange in London, Britain. Hannah McKay, Reuters file photo

LONDON - The Bank of England increased its bond-buying program by 100 billion pounds ($125 billion) on Thursday as it sought to help steer the economy away from a record slump in March and April caused by the coronavirus lockdown.

The BoE kept its benchmark interest rate at 0.1%.

Eight members of the nine-strong Monetary Policy Committee voted to increase the bond purchase program while BoE Chief Economist Andy Haldane voted for no increase.

All nine members voted to keep Bank Rate unchanged.

The central bank said it would spend all the extra 100 billion on government bonds but would slow the pace of its purchases, saying it expected the new total 745 billion-pound target would be hit by the end of the year.

A Reuters poll of economists had pointed to a 100 billion-pound increase in the asset purchase program and Bank Rate remaining at 0.1%.

The BoE is using its bond-buying program as its main policy tool as it tries to help steer Britain's economy away from a record 25% slump in March and April.

There was no mention of the negative interest rates - an option the central bank has said it will consider - in the minutes of the BoE's policy meeting.

($1 = 0.7981 pounds) (Reporting by William Schomberg, editing by David Milliken)