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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: 318763

Reported Deaths: 3652
CountyCasesDeaths
Hennepin673361116
Ramsey28256505
Anoka22583228
Dakota22414190
Washington14207116
Stearns13976117
St. Louis8991112
Scott859755
Wright795543
Olmsted681134
Sherburne601541
Clay508957
Carver486215
Kandiyohi420522
Rice419237
Blue Earth418016
Crow Wing364034
Otter Tail321723
Chisago315612
Nobles309930
Benton305751
Winona284830
Douglas266837
Mower265823
Polk261224
Morrison233829
Lyon223011
Beltrami219218
McLeod217914
Becker209416
Goodhue208428
Steele19917
Isanti194217
Itasca193923
Carlton191316
Todd182514
Nicollet164026
Mille Lacs157031
Freeborn15546
Le Sueur148811
Cass146010
Brown145715
Waseca139811
Pine13958
Meeker13289
Roseau12194
Martin117420
Hubbard115725
Wabasha10781
Redwood97919
Chippewa9147
Cottonwood8964
Renville89529
Dodge8700
Watonwan8634
Wadena8156
Sibley8004
Rock7889
Aitkin77830
Pipestone74118
Fillmore7240
Houston7134
Yellow Medicine66512
Pennington6638
Kanabec62713
Swift5998
Murray5953
Faribault5732
Pope5531
Clearwater5268
Stevens5243
Marshall5059
Jackson4961
Lake4326
Koochiching3996
Wilkin3925
Lac qui Parle3863
Unassigned38559
Lincoln3651
Norman3537
Big Stone3242
Mahnomen3044
Grant2806
Kittson2298
Red Lake2163
Traverse1491
Lake of the Woods1011
Cook770

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 229327

Reported Deaths: 2395
CountyCasesDeaths
Polk33896336
Linn14340166
Scott1132587
Black Hawk10968137
Woodbury10428129
Johnson964137
Dubuque927491
Story684522
Pottawattamie644070
Dallas641757
Sioux372725
Webster363936
Cerro Gordo359046
Marshall351246
Clinton333844
Buena Vista307314
Muscatine293469
Des Moines291620
Warren283214
Plymouth277142
Wapello257372
Jones233615
Jasper224344
Marion206821
Lee205017
Carroll199922
Bremer196712
Henry18417
Crawford176916
Benton171821
Tama154940
Jackson146513
Washington146215
Delaware144921
Dickinson140311
Boone138311
Mahaska127927
Wright12706
Clay11924
Buchanan118510
Hardin116510
Page11524
Hamilton11429
Clayton11238
Cedar109313
Harrison108630
Kossuth10847
Calhoun10757
Mills10647
Floyd106216
Fayette105610
Lyon10538
Butler10266
Poweshiek99713
Winneshiek98413
Iowa97612
Winnebago93124
Cherokee9014
Hancock8737
Sac8738
Grundy87111
Louisa86818
Chickasaw8664
Allamakee82811
Cass81823
Mitchell8035
Appanoose79912
Humboldt7855
Union7796
Shelby77311
Emmet76824
Guthrie76315
Franklin74321
Jefferson7252
Unassigned6950
Madison6924
Palo Alto6574
Keokuk6157
Pocahontas5644
Howard5619
Osceola5341
Greene5310
Ida50013
Clarke4904
Davis4739
Montgomery47011
Taylor4673
Monroe44712
Adair4418
Monona4402
Worth3690
Fremont3663
Van Buren3615
Lucas3296
Decatur3200
Wayne3027
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Ringgold2202
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