Bank of England set to unveil another big stimulus for UK

LONDON (AP) —

The Bank of England is set to unveil another big stimulus for the U.K. economy on Thursday as it tries to limit the scale of the coronavirus recession.

The central bank is expected to join its counterparts around the world, including the U.S. Federal Reserve, in bolstering support measures following the initial radical responses to the economic threat of the pandemic.

The meeting of the bank's monetary policy committee is taking place in the wake of figures showing that the U.K. economy shrank by a fifth in April alone as a result of the country’s lockdown, which has seen many sectors shuttered.

The consensus in financial markets is that it will launch another bond-buying program of at least another 100 billion pounds ($127 billion), to complement the 200 billion stimulus it announced in March when the outbreak was in its ascendancy. The intention would be to keep a lid on interest rates and keep money flowing through the financial system.

However, the committee is not expected to cut interest rates further, specifically reducing the main benchmark to below zero for the first time in the bank's 326-year history — it currently stands at 0.1%.

Although some of Britain's lockdown restrictions are easing, including Monday’s reopening of shops selling nonessential items such as books, sneakers and toys, the U.K. economy is set for one of its deepest recessions ever and a consequent big spike in unemployment. Last month, the Bank warned that the U.K. faced its worst recession since 1706.

In addition to the bank's support measures, the British government is also readying a big fiscal package for this summer to help the economy, potentially involving a sales tax cut and funding big transport and green projects.

It has already implemented an array of...