Bank unleashes another £100bn to boost economy amid signs of ‘less severe’ hit

The Bank of England has launched another £100 billion of economy-boosting action in the face of the coronavirus crisis, despite signs the hit may be “less severe” than first feared. But the Bank said the fall in gross domestic product (GDP) between April and June may be not as bad as it set out in gloomy May forecasts, thanks partly to a recovery in consumer spending and the housing market. It added: “If this persisted, cumulative output losses over the policy horizon could plausibly have halved compared with what had been expected at the time of the May report.” Following the 6% fall in GDP in March and 20.4% plunge in April, the UK economy has begun bouncing back in May and June as lockdown restrictions have eased, according to the Bank. Economists said the pace of QE expansion was likely to slow sharply, with the Bank stating it would complete the latest £100 billion only by the “turn of the year”. “We look for a further QE extension of £50 billion in November, but for the committee to hold back from cutting Bank rate below zero, due to the questionable benefits of such a step.”