This morning the Bank of England launched a new £150bn stimulus package for the UK economy amid the reintroduction of lockdown across England due to the second COVID-19 wave. The new measures to provide additional support will bring the total amount injected into the QE programme to nearly GBP900bn. In a statement the Bank said: ‘COVID-19 continues to hit jobs, incomes and spending in the UK. It has put a big strain on UK businesses cash flow and is threatening the livelihoods of many people’. The Bank did state that the government’s extension of furlough scheme for a further month during the lockdown, and the chancellor’s plan to replace it with the new job support scheme would have a significant impact on protecting jobs. However, it still warned unemployment would rise dramatically, hitting a peak of approximately 7.75% by the summer of next year, up from the current rate of 4.5%.Added to the backdrop of uncertainty over COVID-19 is of course Brexit. The Bank's base case is that it still expects a comprehensive trading partnership, from the start of next year, will be signed at the 11th hour. However leaving the EU would nonetheless drag down GDP by about 1% in the first quarter ‘21 due to tougher trading rules and the fact that many businesses were still ill-prepared.
Talking of Brexit, whilst looking at the presidential odds yesterday we came across the betting for the next country to leave the EU. Sporting Index are spread pricing on which country will be the next to leave. All bets are void if no country leaves the European Union before 1st January 2024. Correct prediction = 100 points. Any other = 0 points. The spread price for the top 4 countries is Italy 18/26 Greece 9/17 Czech Republic 4/10 and France 3/9. Everyone else was 2/7 or lower.