Bank of England to pump £100bn into economy to boost recovery
SHAREWATCH
THE Bank of England has launched another £100bn of economy-boosting action in the face of the coronavirus crisis, despite signs the hit may be “less severe” than first feared.
Members of the Bank’s Monetary Policy Committee (MPC) voted eight to one to expand its quantitative easing (QE) programme to £745bn, on top of the extra £200bn announced in March.
The Bank held interest rates at an all-time low of 0.1%, despite mounting speculation policymakers may look to take rates below zero for the first time ever to pull the economy out of its nosedive.
The extra QE – which sees the Bank buy Government bonds from investors, pumping money into the economy in the process – comes after official figures showed the economy contracted by a record 20.4% in April.
But the Bank said the fall in gross domestic product (GDP) between April and June may be not as bad as it set out in its gloomy May forecasts, thanks partly to a recovery in consumer spending and the housing market.
It now believes the second quarter plunge in UK GDP may be around 20% compared with the final three
AEROSPACE & DEFENCE
AvonRbbr ..................................... £301/2 BAE Systems ................................. 501 Chemring ....................................... 234 Meggitt ........................................... 318 1/8 Rolls-Royce .................................... 335 1/2 Senior ................................................ 79 7/8
AIM
600 Group .......................................... 9 1/2 Highland Gold Mining .............. 225 1/4 Johnson Service Grp ................. 116 3/4 London Security .......................... £21 M”S Intl ........................................... 128 Nichols ......................................... 1380 Scapa Grp ...................................... 120 Youngs ......................................... 1270
BANKS
Barclays .......................................... 118 5/8 HSBC Hldgs ................................... 381 1/2 Lloyds Banking Gp ....................... 32 3/8 Ryl Scotland .................................. 122 1/2 Standard Chartered ................... 423 3/4
BEVERAGES
Barr (AG) ......................................... 473 Diageo ............................................ £28
CHEMICALS
Croda International .................... £51 5/8 Elementis 98 ................................... 66 1/8 Johnsn Mat ................................... £21 3/8
CONSTRUCTION & MATERIALS
BalfourBeatty .............................. 2663/8 C”R”H .............................................. £28 3/4 Costain .............................................. 76 5/8 Marshalls ........................................ 628 1/2
ELECTRICITY
DraxGp .......................................... 2331/4 SSE ................................................ 1388 1/2
ELECTRONIC & ELECTRICAL EQUIPMENT
Morgan Advanced ...................... 237 Ox Instmts .................................. 1456 Volex ................................................ 152 +3/8 -5 5/8 -3 1/2 -1 1/8 +3 3/8 -1/2 -1 3/4 +1 5/8
+3 +20 +2 -5
-3/4 -1/2 -1/8 -1/4 -1 1/4
-11 1/2 -3/8 -1 7/8 +5/8
-3/8 -7 1/2
-1 3/4 +3 1/2 +1 +10 +12 months of 2019, rather than the 27% it forecast in May’s report.
This led one of the MPC members – the Bank’s own chief economist Andy Haldane – to hold off from voting for more QE.
In minutes of the MPC meeting, the Bank said: “The emerging evidence suggested that the fall in global and UK GDP in the second quarter would be less severe than set out in the May Report.
“Although stronger than expected, it was difficult to make a clear inference from that about the recovery thereafter.”
But it warned there were risks of “higher and more persistent” unemployment following the crisis.
Suren Thiru, head of economics at the British Chambers of Commerce (BCC), said: “With economic conditions likely to remain challenging in the near term, further easing remains likely.
“However, with interest rates already at an historical low, extra loosening of monetary policy is unlikely to provide a significant boost to the economy.”
EQUITY INVESTMENT INSTRUMENTS
Aberdeen D I & G Trust ............... 96 5/8 Alliance Trust ................................ 788 Dunedin Inv .................................. 259 Edin Invst ....................................... 480 1/2 Electra Private Equity ................ 208 1/2 F&C Investment Trust ................ 686 Henderson Smllr Cos ................. 797 North American Inc ................... 244 Scot Am .......................................... 422 Scottish Mortgage ..................... 783 Witan ............................................... 185 5/8
FIXED LINE TELECOMMUNICATIONS
BT Grp ............................................. 118 1/8 Talktalk Telecom ............................ 89 3/4
FOOD & DRUG RETAILERS
Morrison (WM) ............................ 188 Sainsbury ....................................... 198 1/2 Tesco ............................................... 226 3/8
FOOD PRODUCERS
AB Food ....................................... 1959 Carrs Group ................................... 110 REA Hldgs ........................................ 67 1/2 TateLyle ......................................... 677 Unilever .......................................... £45 1/8
GAS, WATER & MULTIUTILITIES
Centrica ............................................ 41 7/8 National Grid ................................ 949 3/8 Pennon Grp ................................ 1151 Severn ............................................. £24 7/8 United Utils ................................... 939 5/8
GENERAL FINANCIAL
3i Group ......................................... 816 5/8 Close Bros ................................... 1087 London StockExch ...................... £80 5/8 Man Group .................................... 129 1/2 Provident Financial .................... 187 5/8 Schroders ...................................... £29 1/4 Schroders NV ................................ £22
GENERAL INDUSTRIALS
Smith (DS) ..................................... 330 1/8 Smiths Grp ................................. 1305 -1 1/4 +2 -1/2 -4 1/2 +1/2 -2 +4 +1 +2 +11 +3/4 +3/4 +1/2
-5/8
-8 1/2 -37 3/8 -7/8 -1 3/4 +1 +1/8 -5/8
-6 3/8 -10 -5/8 -1 1/8 -9 -1/2 -1 1/4
-4 3/4 +13
GENERAL RETAILERS
Dixons Carphone .......................... 90 Inchcape ........................................ 4915/8 Kingfisher ...................................... 209 3/4 M & S ............................................... 112 Mothercare ........................................ 8 3/8 Next ................................................. £52 WH Smith ................................... 1145
HEALTH CARE EQUIPMENT & SERVICES
Smith Nph .................................. 1620 1/2
HOUSEHOLD GOODS
Barratt Devel ................................ 503 5/8 Bellway ........................................... £26 1/4 Persimmon .................................... £23 Reckitt Benckiser ........................ £71 3/8 Taylor Wimpey ............................. 142 3/4
INDUSTRIAL ENGINEERING
I”M”I ................................................. 915 Molins ............................................. 158 Renold .............................................. 11 1/4 Spirax-Sarco ............................... £100 Weir Grp ...................................... 1037 1/2
INDUSTRIAL METALS
Ferrexpo ......................................... 189 7/8
INDUSTRIAL TRANSPORTATION
Signature Avi ................................ 235 1/2
LIFE INSURANCE
Aviva ................................................ 278 3/4 Lgl & Gen ....................................... 224 1/2 Prudential ................................... 1210 Standard Life Aberdeen ........... 254 3/4
MEDIA
Daily Mail & Gen Tst ................... 687 ITV ...................................................... 77 3/4 Pearson ........................................... 584 Reach ................................................ 82 3/4 RELX .............................................. 1884 1/2 STV Group ..................................... 230 WPP ................................................. 6403/4 -1 3/8 -7 1/4 -6 1/4 +1/4 +1/4 -7/8 -4 -16 1/2
-9 1/4 -1/2 -3/8 -1/8 -9
+1 1/2
+3/4 -1/8 -10
-10 1/8 +1 1/2
+1/2 +1 3/4 +31 1/2 +2 7/8
-8 -5/8 +5/8 +1 3/4 -13 1/2 -5 -5/8
MINING
Anglo American ....................... 1796 3/4 Antofagasta .................................. 889 3/4 BHP Group ................................. 1621 3/4 Fresnillo .......................................... 758 3/4 Kaz Minerals ................................. 441 3/4 Rio Tinto ......................................... £45
MOBILE TELECOMMUNICATIONS
Vodafone Group ......................... 127
NONLIFE INSURANCE
AdmiralGrp .................................. £231/8 Marsh McL ..................................... £86 7/8 RSA Ins Gp ..................................... 416
OIL & GAS PRODUCERS
BP ..................................................... 314 7/8 Cairn Energy ................................. 122 3/8 Premier Oil ...................................... 48 7/8 Royal Dutch Shell A ................. 1361 3/4 Royal Dutch Shell B ................. 1303 5/8 Total ................................................. £32 1/8 Tullow Oil ......................................... 32 7/8
OIL EQUIPMENT & SERVICES
Petrofac .......................................... 201 7/8 Wood Gp(J) ................................... 226 7/8
PERSONAL GOODS
Burberry Gp ............................... 1563 PZ Cussons .................................... 182 1/4
PHARMACEUTICALS & BIOTECHNOLOGY
Astrazeneca .................................. £84 GlaxoSmithKline ...................... 1647 1/4
REAL ESTATE
Brit Land ......................................... 412 3/4 Hamrsn ........................................... 114 1/2 Intu Properties .................................. 6 1/8 Land Securities ............................ 623 SEGRO ............................................. 882 1/4
-1 7/8 +1/2 +1 +3/4 -1/4 -1/4 -1 1/8
-1 5/8 -7
-35 1/2 +3/8 -1 7/8 -17 3/4
-6 5/8 -5 1/2
-1/2 -8 5/8 -2 3/4
SOFTWARE & COMPUTER SERVICES
Computacenter ........................ 1608 Sage Group ................................... 678 1/4 -16 5/8 -3 1/4 -26 1/4 -7 -8 7/8 -3/4
-2 1/8 -3/8 +3/4
-2 -1
SUPPORT SERVICES
Bunzl ............................................... £21 Capita ................................................ 41 1/2 Connect Group .............................. 14 De La Rue ....................................... 150 Elctro Com ..................................... 669 Electrocomp ................................. 669 Experian ......................................... £28 1/4 G4S ................................................... 111 1/2 Hays ................................................. 124 1/4 Homeserve ................................. 1288 Menzies J ....................................... 137 1/4 Redde Northgate ........................ 250 Rentokil .......................................... 506 1/4 Travis & P ..................................... 1142 1/2
TECHNOLOGY HARDWARE & EQUIPMENT
IBM ................................................... £99 1/8 Spirent Comms ............................ 243
TOBACCO
Br Am Tob ...................................... £31 3/8 Imperial Brands ........................ 1511 1/2
TRAVEL & LEISURE
Carnival ....................................... 1261 Compass Grp ............................. 1144 easyJet ............................................ 803 1/4 FirstGroup ....................................... 56 1/4 Go-Ahead Gp ............................... 994 Intercontl Htls .............................. £39 3/4 Intl Cons Airl ................................. 269 Marston’s .......................................... 64 3/8 Mitchells & Butlers ...................... 216 Natl Express .................................. 242 5/8 Rank Org ........................................ 159 3/8 Restaurant Grp .............................. 66 Ryanair ......................................... 1028 3/4 Stagecoach Group ....................... 67 7/8 Whitbread ..................................... £24 3/8 William Hill .................................... 136 3/4
INDEX FTSE 100 ......................... 6224.07 FTSE 250 ....................... 17518.26
+1/8 -5/8 -1/8 -10 5/8 +6 1/2 +6 1/2
+3 1/8 +5/8 +12 +4 3/4
+5 3/8 -9 1/2 -3/4 -8 1/2
-14 +23 +11 +1/2 -17 +5/8 -1 1/2 -1 1/4 +3 +8 +4 3/8 -2 5/8 +37 7/8 +1 1/4 +3/4 +5 1/2
-29.18 -64.10