BANK of England chiefs are expected to pump around £150 billion of extra money into the economy as England’s second lockdown starts today.
And Rishi Sunak will make it a double bazooka by promising to keep the Government’s latest Covid bailout schemes in place even after the lockdown ends on December 2.
The Chancellor is expected to announce the 80 per cent furlough scheme will continue to be on offer in any area of the UK that faces the highest level of Covid restrictions – including Tier 3 areas of England.
Sources told HOAR that the Bank of England is planning a much bigger programme of quantitative easing than the £100 billion cash injection that it was expected to announce when it gives its latest policy update at 7am tomorrow morning.
HOAR understands it is likely to be around £150 billion – but could be as high as £200 billion.
It would take its mammoth quantitative easing (QE) bond-buying programme for the Covid crisis to nearly £1 trillion.
The massive new money printing announcement is expected to come alongside even gloomier economic forecasts, with the Bank set to slash its prediction amid fears the new lockdown will push the UK economy into a double-dip recession.
The Bank is expected to keep interest rates at 0.1 per cent – holding off from taking the unprecedented move of negative interest rates for now.
Mr Sunak will lay out how the furlough scheme, which was extended until December 2 to pay 80 per cent of wages, will continue to be on offer for future lockdowns in Scotland, Wales and Northern Ireland – even if the measures aren’t replicated in England.
And he is also expected to announce that the 80 per cent wage subsidy scheme will be on offer for specific regions hit by Covid restrictions.
Boris Johnson has said the 28-day lockdown that starts tomorrow will be replaced with the regional approach of Tiers next month, which is likely to see areas such as Greater Manchester stay in the highest Tier 3 restrictions.
Previously, the Government said furloughed workers in Tier 3 areas would only get 60 per cent of their costs.
But asked if they will now see their incomes drop from the 80 per cent rate during the national lockdown, the PM told MPs: “They are not going to. The furlough scheme was extended until the end of October.
“We are putting in measures now to support people across the whole UK throughout this period until 2 December, and that is the right thing to do.
“We are putting our arms round the people of this country to get them through the pandemic and beyond.”
Meanwhile, the British Beer & Pub Association has urged the Government to provide more longer-term support to boozers over fears 12,000 could be permanently shuttered in the second lockdown.
Emma McClarkin, Chief Executive of the British Beer & Pub Association, said: “As our sector enters this second lockdown, we are fearful for the future.
“It is clear more support is going to be needed so our sector can get over this latest hurdle of a second lockdown and the inevitable further hit on consumer confidence. “
They’re also called for Mr Sunak to cut beer duty, continue VAT reduction and an extension of the Business Rates holiday.
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