UK plc has tanked at twice the financial crisis rate but the bank has only one meaningful weapon left – QE
Back in August the Bank of England was relatively chipper about the economy. It was the month of “Eat out to help out”, sectors that had been locked down as a result of the pandemic were opening up and growth was exceeding expectations.
Three months on, the outlook – courtesy of a second wave of Covid-19 – has become much darker. Instead of the 5.5% economic expansion it had been pencilling in for the final three months of 2020 Threadneedle Street is assuming a 2% decline.