Bank of England ramps up stimulus again

A hazy start to day one of a fresh lockdown in England.

Much of London's skyline was masked by thick fog on Thursday (Nov 5).

But the Bank of England was hoping to provide some light as it prepared for impending economic damage from the new restrictions as well as the looming impact of Brexit.

Britain's central bank increased its already huge bond-buying stimulus by a bigger-than-expected $195 billion.

And raised the total size of its asset-purchase program to $1.16 trillion.

That was more than expected by most economists in a Reuters poll.

But the bank said the move would give it enough firepower to stretch its buying of government bonds through to the end of next year.

Forecasts for Britain's economy were also slashed in its quarterly outlook.

Previously, the BoE had expected the recovery be complete by the end of next year.

Now the central bank says "the outlook for the economy remains unusually uncertain".

It now predicts Britain's economy will shrink by 2% during the fourth quarter of this year, as England re-enters lockdown.

Britain's economy has been supported by a surge in debt-fueled spending by the government.

The BoE has been buying up many of those bonds.

Rates remained on hold Thursday, as expected, and there was little mention of any plan to take them below zero.

There was confusion though over how news about the expansion of QE had been reported early by the Sun newspaper.

Bank of England Governor Andrew Bailey said he would look into the circumstances surrounding an article published by The Sun late on Wednesday (November 4).