Bank of England holds interest rates as new coronavirus lockdown begins

A woman wearing a protective face mask crosses the road in front of the Bank of England in what would normally be the morning rush hour in the City of London on March 17th, 2020. The financial district of the UK is unusually quiet after the government requested people to refrain from all but essential travel and activities yesterday.

Jonathan Perugia

The U.K.’s central bank on Thursday held interest rates steady as England enters a fresh period of national lockdown measures expected to hit the country’s economic recovery.

Last month, the Bank of England (BOE) asked British banks about their preparedness for negative interest rates, having revealed in September that it was exploring the possibility of taking rates below zero if necessary.

Since the onset of the coronavirus pandemic in March, the Bank has cut rates twice from 0.75% to 0.1% and launched a bond-buying program worth £745 billion ($965.1 billion).

The British economy grew 2.1% in August, according to figures released last month by the Office for National Statistics, having suffered an unprecedented 19.8% contraction in the second quarter during the height of nationwide lockdown measures.

With cases spiking in the country once again, Prime Minister Boris Johnson’s government has announced a new lockdown, running in England from Thursday to December 2. On Wednesday, 492 people died in the U.K. from Covid-19, the highest daily death toll since May 19, while 25,177 new cases were confirmed.

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