Getting out the gate earlier than usual, the Bank of England revealed it was keeping interest rates at a record low of 0.1% on Thursday while keeping its bong-buying targets unchanged, as it unveiled a series of forecasts predicting the worst economic slump for potentially 300 years.
The headline takeaways are all rather terrifying: a 14% contraction in the UK in 2020 (and a 25% slump in Q2), with unemployment of 9% fast approaching. Globally the central bank is expecting to shrink by 20% in the second quarter.
Crucially, it did also state that it expects an aggressive rebound in 2021, with growth of as much as 15% in the UK.
This, combined with the ongoing and prospective lockdown-easing measures around the world – even if the wisdom of such decisions, especially in the US where death is becoming government policy, are questionable – helped the markets tentatively rise after the bell.
The FTSE inched 0.3% higher, keeping it stuck between 5850 and 5900, with the DAX and CAC slightly more robust, climbing 0.5% and 0.4% respectively. The UK index may have been perkier if the pound wasn’t also up 0.3% against the dollar and euro alike.
As for the Dow Jones, after eventually closing Wednesday in the red, it is looking to reclaim around 180 points, pushing it back towards 23850 (it is really struggling to breach, and hold above, 24000).
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