Today the Bank of England decided to bump up its asset purchasing program quite aggressively. The central bank’s quantitative easing went from 745 billion pounds up to 875 billion, surpassing the forecast for the increase by a whole 50 billion GBP. Though the Bank of England did not change its interest rate, this stimulus will be welcome by the UK economy, which is hit pretty hard by the coronavirus.
Yesterday the United Kingdom reported over 25,000 new Covid-19 cases, its second highest number ever. The amount of daily infections has continued to increase on the island, despite new lockdown measures implemented across the kingdom. The capital city London is likely going to be the next target of a massive lockdown.
Meanwhile, the United States, which is the single most affected country in the world by the coronavirus, hit an all-time record high yesterday with roughly 108,000 new Covid-19 cases. President Trump’s administration has refused to order a new set of lockdowns even as the pandemic spread further throughout the country.
Unsurprisingly, the jobless claims data published today in the United States was not great. Initial jobless claims climbed more than expected, while the continuing ones dropped by less than forecasted. Recall that the data is also lagging by at least a week due to the nature of the report.
Still, any development in the United States is currently overshadowed by the presidential elections. Today marks the third day since the election and at least six states remain undeclared. It is possible that by the end day (US time) the next president will be known.
Currently Joe Biden is in the lead and is expected to collect more votes as the mail-in ballots are being processed. He could even win the highly contested Pennsylvania and steal the traditionally Republican state of Georgia from Donald Trump.
There is also a Federal Reserve meeting today, but it is not certain if more stimulus will be announced now. The economy needs it but the Fed may choose to wait out the elections, hoping for a Democrat-led White House that will devise its own generous stimulus plans.
