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Bank of England unleashes more stimulus as UK economy sinks

More than 50,000 people in the United Kingdom have died after contracting Covid-19, according to statistic bodies from all of the nations within the UK. CNN's Nic Robertson reports on how Britain reached this grim milestone.

Posted: Jun 23, 2020 7:40 AM
Updated: Jun 23, 2020 7:40 AM

The Bank of England is throwing more money at the British economy as the country tries to stave off its worst downturn in more than 300 years.

The central bank said Thursday that it would increase its bond-buying program by another £100 billion ($125 billion), bringing the total up to £745 billion ($929 billion). The Bank of England said it will reach that target by the end of the year.

The move adds to the trillions of dollars in stimulus already pledged by central banks around the world as policymakers take unprecedented steps to tackle the global recession, falling inflation and extreme unemployment stemming from the pandemic. The Bank of England's purchases of government bonds are helping the UK government to finance recovery efforts as it borrows record amounts.

The country is in particularly rough shape. It has one of the highest coronavirus death tolls in the world and an economy that is only very gradually emerging from lockdown. UK GDP contracted by more than 20% in April, a record, following a 6% decline in March. The Organization for Economic Cooperation and Development warned last week that the United Kingdom would suffer the worst downturn of any major economy this year.

There are some signs that consumer spending is picking up as restrictions ease, according to the Bank of England, which held its key interest rate at 0.1%. Yet inflation fell back to 0.5% in May, and the central bank warned that it's difficult to determine the strength of the expected recovery in the second half of the year.

"Even with the relaxation of some Covid-related restrictions on economic activity, a degree of precautionary behavior by households and businesses is likely to persist," the Bank of England said. "The economy, and especially the labor market, will therefore take some time to recover towards its previous path."

There's another huge cloud hanging over the economy and its ability to recover: Britain has set itself a deadline of the end of the year to get a trade deal with the European Union, its single biggest export market. Little progress has been made in talks so far.

The OECD has forecast that the UK economy will shrink by 11.5% this year even if a basic free trade agreement with the bloc is reached and a second wave of infections is avoided.

With the recovery expected to take years, economists predict that more action from the Bank of England will be needed down the line. That's sparked discussion about whether the central bank could opt to push interest rates into negative territory, a controversial measure already deployed by the European Central Bank and Bank of Japan.

"The need to continue supporting the economy will undoubtedly fuel further discussion about whether negative rates are on the horizon," James Smith, developed markets economist at ING, told clients Thursday.

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 612001

Reported Deaths: 7756
CountyCasesDeaths
Hennepin1269201801
Ramsey53281911
Dakota47414477
Anoka43426465
Washington27780296
Stearns22738227
St. Louis18329319
Scott17747139
Wright16603153
Olmsted13567103
Sherburne1217096
Carver1078349
Clay830492
Rice8283112
Blue Earth772444
Crow Wing691299
Kandiyohi672285
Chisago629355
Otter Tail591987
Benton587798
Goodhue487274
Douglas480381
Mower478634
Winona465452
Itasca463768
Isanti447267
McLeod435861
Morrison429262
Beltrami411563
Nobles410950
Steele401619
Polk391272
Becker389957
Lyon366154
Carlton357158
Freeborn353134
Pine338123
Nicollet335045
Mille Lacs315756
Brown309140
Le Sueur301028
Todd289233
Cass288933
Meeker267344
Waseca241723
Martin237433
Roseau212721
Wabasha20873
Hubbard198741
Dodge19133
Renville184246
Redwood178741
Houston176016
Cottonwood168224
Wadena165223
Fillmore160110
Faribault157420
Chippewa154238
Pennington154120
Kanabec148028
Sibley147410
Aitkin140037
Watonwan13629
Rock129719
Jackson123112
Pipestone117226
Yellow Medicine115620
Pope11416
Swift107718
Murray107610
Koochiching96819
Stevens92611
Clearwater89517
Marshall89017
Lake85020
Wilkin84213
Lac qui Parle76222
Big Stone6114
Grant5958
Lincoln5863
Mahnomen5669
Norman5509
Kittson49222
Unassigned48393
Red Lake4037
Traverse3835
Lake of the Woods3504
Cook1740

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 376815

Reported Deaths: 6122
CountyCasesDeaths
Polk59215646
Linn21567342
Scott20530250
Black Hawk16850320
Woodbury15378230
Johnson1479586
Dubuque13627215
Dallas1150699
Pottawattamie11393177
Story1092548
Warren594392
Clinton565894
Cerro Gordo564898
Webster546397
Sioux520574
Muscatine4956106
Marshall493679
Des Moines481776
Jasper454273
Wapello4402124
Buena Vista432340
Plymouth405782
Lee396958
Marion372378
Henry301737
Jones301357
Bremer294663
Carroll287252
Boone273735
Crawford273541
Benton264255
Washington261051
Dickinson251145
Mahaska235151
Jackson225943
Kossuth222166
Clay217927
Tama213872
Delaware213343
Winneshiek201337
Buchanan197834
Page195722
Cedar194323
Hardin192544
Wright191240
Hamilton189251
Fayette188943
Harrison182873
Clayton173258
Butler169135
Madison168019
Floyd165242
Mills164724
Cherokee162238
Lyon161241
Poweshiek159836
Allamakee156452
Hancock154034
Iowa149124
Winnebago147031
Calhoun144813
Cass142155
Grundy139733
Emmet137341
Jefferson135535
Sac133320
Shelby132238
Louisa130749
Union129535
Franklin129223
Appanoose128749
Mitchell127343
Chickasaw126017
Humboldt126026
Guthrie125332
Palo Alto115224
Montgomery106938
Howard105522
Clarke102624
Monroe101533
Keokuk100432
Ida93735
Adair90132
Davis88525
Pocahontas87022
Monona86731
Greene80011
Osceola79517
Lucas78323
Worth7648
Taylor67112
Decatur6649
Fremont64910
Van Buren57318
Ringgold57124
Wayne56623
Audubon53613
Adams3504
Unassigned80
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