‘NEW DEAL’ TO BOOST ECONOMY
The Prime Minister has set out government plans to deliver a post-lockdown economic recovery, with a promise to accelerate £5bn worth of spending pledges on a range of infrastructure projects across the country. During a speech delivered at the Dudley College of Technology on 30 June, Mr Johnson promised to “build, build, build”, in order to soften the impact the COVID-19 pandemic has wreaked on the UK economy. Although on a much smaller scale, the plan aims to emulate the New Deal policies of President Franklin D. Roosevelt, which increased the state’s role in the US economy in order to aid recovery from the Great Depression of the early 1930s.
Among the projects included within the Prime Minister’s £5bn investment plan are: £1.5bn for hospital maintenance; more than £1bn to fund a schools building project; £83m for maintenance of prisons and youth offender facilities; £100m for road network projects and between £500,000–£1m for each area in the Towns Fund, earmarked for improvements to parks, high streets and transport…..
LONG ROAD TO RECOVERY BEGINS
Although data released by the Office for National Statistics (ONS) vividly shows the UK is in the midst of an unprecedented slump, more recent evidence does imply the worst may be over, with signs of a pick-up in economic activity. The latest gross domestic product (GDP) statistics published by ONS revealed the huge economic impact inflicted by the corona virus lockdown measures. Overall, the UK economy contracted by 20.4% during April, the largest ever recorded monthly fall in GDP, with virtually every sector shrinking…..
INTEREST RATES ON HOLD
The Bank of England (BoE) left interest rates unchanged following the latest meeting of its Monetary Policy Committee (MPC), amid signs of recovery from the country’s unprecedented economic slump. At a meeting held on 17 June, the MPC voted unanimously to maintain the Bank Rate at a record low of 0.1%. In addition, BoE Governor Andrew Bailey confirmed that the prospect of taking rates below zero had not been discussed and again emphasised that any decision to move borrowing costs into negative territory was not in any way imminent…..