Bank of England – The Bank of England’s (BoE) monetary policy committee members voted unanimously to keep interest rates at 0.1%, citing a slower than expected economic recovery post Covid-19 lockdown. The BoE said that the economy would not recover to its pre-pandemic size until the end of 2021, which is slightly longer than originally estimated. BoE Governor, Andrew Bailey, stated that negative rates, which are already being used by the European Central Bank and the Bank of Japan, are “part of the toolbox…but at the moment, we do not have a plan to use them”. In more positive news, the BoE’s projections forecast that unemployment is expected to peak at around 7.5% by the end of 2020, which is lower than the previous
prediction of just under 10%.
Lebanon economic crisis – The economic crisis in Lebanon deepened further after an explosion at the shipping port of the capital city, Beirut. The explosion, caused by thousands of tons of poorly stored ammonium nitrate setting alight, sent shockwaves through the capital, killing 400 people, injuring 4,000 and leaving thousands homeless. Added to this, the government defaulted on its loan re-payments in March this year, the currency is devaluing rapidly leading to inflation pushing above 50%, and there are ongoing protests against government corruption. French Prime Minister, Emanuel Macron, paid a visit to the Lebanese capital on Thursday to pledge financial aid, but warned that the country must reform its corrupt
ways if they are to receive the funds.
US-Sino relations – Once again, US President, Donald Trump, has escalated tensions between the US and China, as he seeks to curb China’s power in global technology. President Trump signed two executive orders banning US residents from doing business with the Chinese owned TikTok and WeChat apps, beginning 45 days from now. Asian equity markets fell on the news, as China said that the US is engaging in “political manipulation and oppression”.
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