Bank of England boosts QE by £150bn and predicts lockdown downturn – business live

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Rolling coverage of the latest economic and financial news, as BoE predicts the UK economy will shrink again this quarter

7.17am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

We start with some breaking news: The Bank of England has boosted its quantitative easing stimulus package by £150bn, and warned that Britain is entering a double-dip downturn.

There are signs that consumer spending has softened across a range of high-frequency indicators, while investment intentions have remained weak…

Developments related to Covid will weigh on near-term spending to a greater extent than projected in the August Report, leading to a decline in GDP in 2020 Q4.

Related: England enters second lockdown after MPs approve regulation

Over the remainder of the forecast period, GDP is projected to recover further as the direct impact of Covid on the economy is assumed to wane. Activity is also supported by the substantial fiscal policies already announced and accommodative monetary policy.

The recovery takes time, however, and the risks around the GDP projection are judged to be skewed to the downside.

Rishi Sunak is expected to announce an extension of furlough beyond December amid growing pressure from business leaders to safeguard jobs and the economy during the coronavirus second wave.

The chancellor is preparing to announce that the flagship wage subsidy scheme – which pays 80% of workers’ wages – will continue to be made available for parts of the country under the highest levels of Covid restrictions, sources said, in a major climbdown for the government.

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