Jobs fears as Sanjeev Gupta puts seven UK steel plants up for sale
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Banks told to prepare for negative rates
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- Quantitative Easing to be expanded
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The
Bank of England will cut its basic interest rate and raise its quantitative easing programme to support the lockdown-ravaged UK economy, according analysts at major pan-European lender and investment bank.
Société Générale says that much has changed since the Bank s economists released their last set of forecasts back in November, with a harsh lockdown being introduced in January materially shifting the economy s outlook for the worse.
As such, policy makers will act by increasing the stimulus they on offer to the struggling economy.
The move would likely come as a surprise to the market as the consensus view is that the Bank is willing to keep interest rates unchanged and look through current difficulties facing the economy, choosing to focus on a spring rebound in activity.
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The
Bank of England s February policy decision forms the key risk for the British Pound on Thursday as foreign exchange markets eagerly await a verdict on whether an interest rate cut to 0% or below is likely either today, or at some point in coming weeks and months.
Such a rate cut has never been attempted in the UK before and the Bank s decision will therefore have significant implications for the UK financial system.