The Bank of England (BOE) is likely to increase its quantitative easing next month to support an economy pressed by the coronavirus revival and concerns over hard Brexit, according to a recent Reuters survey of 78 economists.
The re-implementation of new sanctions due to the surge in cases will further exacerbate projections on economic growth that had previously been affected by nationwide closures as the coronavirus epidemic began to spread in the UK. In the second quarter, the UK economy reported a contraction of 19.8%.
Following the resurgence of Covid-19 cases in Europe, the outlook for economic growth in the UK is now changing gloomily.
According to a recent survey by Reuters, the British economy is projected to grow 2.6% in the current quarter and 1.0 following. This projection is weaker than the 3.4% and 1.3% forecasts made last month.
For 2020 as a whole, the economy will decline by 10.1% but grow by 6.1% next year, according to a survey of 78 economists, compared to the expected contraction of 10.1% and 6.1% growth last month.
Moreover, most analysts expect that the BOE will implement more additional measures, particularly increasing bond purchases but will not lower interest rates below zero.
After adding £ 300 billion to the bond purchase program to the tune of £ 745 billion, the survey predicts an increase of £ 100 billion will be made at the next policy meeting on 5 November.
Meanwhile, a Reuters poll also shows that there is a 40% chance that no agreement will be reached on UK trade relations with the European Union (EU) by the transition deadline, as previously predicted.
