Bank of England announces additional package of £65 billion to revive Briti

London: Last week, the ‘mini-budget’ presented by British Finance Minister rocked the economy. Against this backdrop, the British central bank announced an additional £65 billion in aid to revive the economy. The Bank of England informed that these funds would be used to purchase government bonds issued by the British government. Meanwhile, British Prime Minister Liz Truss has supported the provisions of the ‘mini-budget’ and said that some unpleasant and painful decisions must be made.

Last week, new British Finance Minister Kwasi Kwarteng announced a ‘mini-budget’ to boost the economy. It included tax cuts, caps on electricity bills, and additional government borrowing. This mini-budget invoked strong reactions from the industrial sector, stock market and investment sector in United Kingdom. The British pound sterling has fallen to record lows against the USD. The FTSE 100, the leading British stock index, fell by more than three per cent. At the same time, the housing sector of the United Kingdom has also received a big shock, and it has come to light that banks and financial institutions cancelled more than 1000 transactions within 24 hours.

It is said that the ‘Bank of England’ has decided to intervene as the fall of the British pound and share index that started last week continued this week. The Bank of England announced its decision to buy government bonds on Wednesday. Accordingly, UK central bank will buy debt securities known as ‘Gilts’. The Bank of England said that a provision of £65 billion had been made to purchase these bonds. After this announcement, the decline in the value of the British pound and the stock market was seen to have been halted to some extent.

Despite intervention by the Bank of England, British Prime Minister Liz Truss has backed last week’s ‘mini budget’. Prime Minister Truss clarified during an interview, ‘Some difficult and controversial decisions will have to be taken for the growth of British economy and the control of inflation. As Prime Minister, I have to take this step. I believe the plan you have put forward is the right one. Finance Minister Kwarteng also claimed that his development plan was correct and said that the provisions in the mini-budget were designed with long-term considerations in mind.

But economists and analysts, including the former head of the Bank of England, have criticized the British mini-budget. Many have expressed displeasure over the proposal to cut taxes and warned that it would harm the economy. There is a mixed reaction from the British public, and many have expressed fears that the ‘cost of living crisis will intensify.