Bailey said that while the overall output is holding up better than expected in May, there’s probably worse to come for employment. Jobless claims have risen sharply and the number of workers on the government’s furlough program is higher than the BOE had anticipated.
“We certainly do see signs of activity picking up,” Bailey said. But “we also have quite a strong focus on the labor market,” where the data are “quite mixed.”
The new pace of bond purchases means the total QE target of 745 billion pounds should be reached around the end of the year, and the bank didn’t indicate a possible extension into 2021.
The UK missed the narrow window to get ahead of the virus and instead has had to deal with a prolonged period of uncertainty where economic statistic volatility is creating a great deal of uncertainty. The massive decline in GDP reported last week is likely to be countered by an historic rebound which benefits from the low base effect when it is next reported.Click HERE to subscribe to Fuller Treacy Money Back to top