During a press briefing following the Bank of England’s policy decision, the governor, Andrew Bailey, said Britain’s economy is recovering a bit more quickly than the central bank thought a month ago, although the news from the jobs market is mostly negative. He said:

As partial lifting of the measures takes place, we see signs of some activity returning.

We don’t want to get too carried away by this. Let’s be clear, we’re still living in very unusual times.

Deputy governor Ben Broadbend said the central bank now estimates that Britain’s economy is heading for a 20% contraction in the first half of the year, better than the 27% decline projected a month ago.

In other news, the rice company Uncle Ben’s is to scrap the image of a black farmer the brand has used since the 1940s and could change its name, as companies react to growing concerns over racial bias and injustice, reports Mark Sweney.

The parent company, Mars, said Uncle Ben was a fictional character whose name was first used in 1946 as a reference to an African American Texan rice farmer. The image who personifies the brand “was a beloved Chicago chef and waiter named Frank Brown”, the company said.

Mars also said, however, that it recognised the use of the character was out of step with the times, and pledged to overhaul the brand following sweeping calls for racial equality following the death of George Floyd and the Black Lives Matter campaign.

Back to the UK – Andrew Tyrie, chair of the UK’s Competition and Markets Authority, will step down in September, just over two years after taking up the role, the competition watchdog has announced.

Tyrie, a former senior Conservative MP, said:

On taking the role, I was asked by the government to map out a route to a new type of competition authority, one better equipped to understand and respond to what most concerns ordinary consumers: penalties for loyal customers, price discrimination against vulnerable consumers, the difficulties faced by millions in getting good deals online, among them.

I was also asked to suggest ways in which the CMA could become more agile, less legally encumbered, and also with closer international ties, reflecting both the increasingly global and often digital nature of consumer detriment, and the CMA’s enhanced post-Brexit role.

We’ve all, particularly the most senior executive team and the board, worked hard at the CMA to do that.

The CMA submitted proposals for wide-ranging legislative changes to the government last year.

It has taken forward important work to protect consumers, and it has imposed tougher penalties on those who break competition law.

And in our response to the coronavirus outbreak, we’ve reoriented the organisation to listen and act on consumer concerns more quickly and effectively. In responding, the CMA has shown a remarkable and unprecedented capacity to develop an emergency role.

The opening bell has rung on Wall Street. US stocks are heading lower, mirroring European declines.

• S&P 500 down 17.5 points, or 0.56%, at 3,05
• Dow Jones down nearly 210 points, or 0.8%, at 25909
• Nasdaq down 18 points, or 0.19%, at 9,892

Wall Street is set to open lower in 20 minutes, as fears of a second Covid-19 wave persist, and weekly US jobless claims came in higher than expected at 1.508m, suggesting a second wave of layoffs after the initial round sparked by the coronavirus pandemic.

Speaking to Reuters, Steven Blitz, chief US economist at research firm TS Lombard in New York, says about the latest weekly jobless claims figure:

People will say claims are coming down, but for an economy that is reopening, that is a huge number.

The economy is losing workers and employment beyond the initial impact tied to businesses that shut down. There are a lot of industries that are getting hurt and that’s starting to cascade down, that is what those numbers are showing.

And Holger Zschäpitz, senior editor at the economic and financial desk of the German daily Die Welt and its Sunday edition, has tweeted:

The head of the US Federal Reserve, Jerome Powell, delivered a cautious message earlier this week when he testified before the Senate and the House financial services committee. He said that “significant uncertainty remains about the timing and strength of the recovery”. Looks like his caution was justified...

James Smith, developed markets economist at ING, sums up the situation neatly:

The Bank of England has expanded its QE programme, but more importantly, the calmer rate market conditions have given policymakers enough confidence to slow the pace of purchases. Still, the myriad of risks facing the economy suggests that the Bank could come under further pressure to do more - and that will undoubtedly fuel discussion of negative rates.

Thomas Pugh, UK economist at Capital Economics, has looked at the slower pace of bond-buying:

This extra £100bn of QE (all gilts, not corporate bonds) comes on top of the £200bn announced in mid-March. And as the MPC said it expects to complete these extra purchases around the turn of the year, that implies a much slower rate of purchases of about £4bn a week down from the recent rate of about £13.5bn a week.

This implies that the Bank thinks it has done enough for now. Our view that inflation will still be closer to 1.0% by the end of 2022 than the Bank’s 2.0% target, suggests more QE will be needed eventually.

Here is our full story on the Bank of England:

What’s the outlook for Britain’s savers?

Laura Suter, personal finance analyst at the investment platform AJ Bell, says the news that the base rate will stay at 0.1% coupled with the further drop in inflation to 0.5% in May is some small relief to savers, who have seen rates cut across the board.

The flood of people saving money in lockdown together with record low Base Rate means finding a decent savings rate is like trying to find loo roll at the start of the crisis – pretty tricky.

Marcus by Goldman Sachs, which has been the darling of the saving market since launching in the UK and having consistently market-leading rates, has pulled out of the market after such an influx of new customers, leaving a hole for savers.

We are now in the rare situation where the government-backed NS&I is offering the market-leading east-access savings rate. But even here savers have been frustrated as the sheer volume of new customers, coupled with the restrictions on the organisation of working from home, mean many report long waits to open accounts or speak to customer service.

Rachel Winter, associate investment director at the investment firm Killik & Co, says:

As interest rates remain at historic lows, the reality is that we may see them stay at this level, or even drop to negative as early as next year. The prospect of negative rates has only recently been floated by the central bank due to the UK-wide lockdown having had a far greater hit on the economy than predicted, with a 20.4% contraction in April – another record. For now, the fresh round of QE will provide another cash injection; perhaps biding time until we can start to see the effect of lockdown restrictions easing.

As non-essential businesses have now been allowed to re-open, and assuming that social distancing measures will be further relaxed over the coming months, we could see sectors such as retail rebound quicker than others.

The next few months are crucial, but the Bank may need to take bold action if the economic nosedive does not start to change direction, limiting the longevity of any recession. This isn’t only a consideration for the UK: global rates are expected to remain low and the Fed has already confirmed it will not raise rates until 2023.

Returning to the cavalry analogy, Neil Wilson, chief market analyst at Markets.com, has (rightly) criticised my choice of picture earlier. Here is a far better one!

The FTSE 100 index is now trading 0.8% lower, a fall of 50 points, to 6,202. Sterling is off its lows, trading at $1.2510 against the dollar, down 0.3%, and at €1.1128 versus the euro, also down 0.3%.

Gilts – UK government bonds - sold off, resulting in higher yields.

Suren Thiru, head of economics of the British Chambers of Commerce, has sent us the lobby group’s thoughts. He is calling for more stimulus measures from the UK government to supplement the Bank of England’s action.

The Bank of England’s decision to significantly expand quantitative easing reflects the unprecedented impact of coronavirus on the UK economy. It is vital that the Bank works with financial institutions to ensure that it translates into on the ground support for businesses.

With economic conditions likely to remain challenging in the near term, further easing remains likely. However, with interest rates already at an historical low, extra loosening of monetary policy is unlikely to provide a significant boost to the economy. The central bank has rightly decided against moving interest rates into the negative, which risks doing more harm than good.

The focus instead should be on delivering a fiscal environment that limits economic scarring and helps kickstart a recovery. This should include taking steps to close the remaining gaps in government support, including giving businesses with direct incentives to invest and hire, and stimulating consumer demand through a temporary, but significant cut in VAT.

Rupert Thompson, chief investment officer at Kingswood, another wealth management firm, says “a further top up [in QE] is quite likely later in the summer”.

The Bank has been purchasing almost all the gilts issued in recent months to finance the covid-related support measures and would otherwise have reached its limit in July.

The Bank rate, by contrast, was left unchanged at 0.1%. While the Bank has been looking into the possibility of pushing rates into negative territory, this would be a move of last resort and only be implemented if the economic recovery now starting to get underway runs into problems later in the year.

And here is the Resolution Foundation, a respected think tank.

So what do economists think of the Bank’s move?

Dean Turner, economist at UBS Global Wealth Management, says speculation around negative interest rates won’t go away. (The Swiss National Bank has negative rates, for example, the lowest in the world.)

As expected, the Bank has kept interest rates unchanged at today’s meeting. However, speculation of changes to the base rate, with the potential of negative rates, refuses to go away - this genie is going to be very hard to get back into the bottle now that it has been released. At this stage, we don’t believe the Bank will take rates lower this summer, let alone into negative territory.

We may, however, see some evolution in the funding schemes for banks, to support lending to the economy. This could raise a few eyebrows, but has the potential to be more successful in increasing the flow of credit than cutting base rates alone.

We continue to see concerns around the potential for negative interest rates, and more recently Brexit, as overdone. We expect the pound to strengthen against the weakening dollar as the year progresses.

Here are the central bank’s comments in full that explain why it is slowing the asset-purchase programme, contained in the minutes of today’s meeting.

The committee expected the new asset purchase programme to be completed, and the total stock of purchases to reach £745bn, around the turn of the year. With liquidity conditions having stabilised, purchases could now be conducted at a slower pace than during the earlier period of dysfunction. Should conditions worsen materially again, however, the Bank stood ready to increase the pace of purchases to ensure the effective transmission of monetary policy.

The FTSE 100 index has extended losses since the decision was announced, and is now down 0.72% at 6,208, a loss of 44 points.

Markets had been expecting a £100bn increase in QE and no change to interest rates, but the slower pace of the bond-buying programme and Andy Haldane’s dissenting vote were unexpected. The City had been expecting a unanimous vote.

More from the Bank of England statement, which explains today’s policy moves:

The emerging evidence suggests that the fall in global and UK GDP in 2020 Q2 will be less severe than set out in the May Report. Although stronger than expected, it is difficult to make a clear inference from that about the recovery thereafter.

There is a risk of higher and more persistent unemployment in the United Kingdom. Even with the relaxation of some Covid-related restrictions on economic activity, a degree of precautionary behaviour by households and businesses is likely to persist. The economy, and especially the labour market, will therefore take some time to recover towards its previous path.

From the horse’s mouth:

There are signs of consumer spending and services output picking up, following the easing of Covid-related restrictions on economic activity. Recent additional announcements of easier monetary and fiscal policy will help to support the recovery.

Downside risks to the global outlook remain, however, including from the spread of Covid-19 within emerging market economies and from a return to a higher rate of infection in advanced economies.

You can read the full Bank of England statement here.

The Bank of England expects the asset-purchase programme to be conducted “at a slower pace” and to be completed around the turn of the year.

Eight members on the Bank’s monetary policy committee voted in favour of expanding the QE programme, while Andy Haldane, the central bank’s chief economist, voted against the move, minutes of today’s meeting show.

The European Union could go it alone and impose taxes on big digital firms such as Google, Amazon and Facebook after the US announced it would pull out of negotiations with European countries on new international tax rules, France said this morning.

The French finance minister, Bruno Le Maire, called the US move a “provocation”. He said France, Britain, Italy and Spain had jointly responded to a letter from US Treasury Secretary Steven Mnuchin.

This letter is a provocation. It’s a provocation towards all the partners at the OECD when we were centimetres away from a deal on the taxation of digital giants.

Nearly 140 countries are taking part in the talks organised by the Organisation for Economic Co-operation and Development, in the first major write of global tax rules in a generation. They aim to reach a deal by the end of the year.

Neil Wilson, chief market analyst at trading platform Markets.com, says the Bank of England and the UK government will need to “coordinate throwing more money at the problem” as they try to steer Britain’s economy through its worst downturn in 300 years.

Central banks need to be marshalled like cavalry and stimulus like charges.

The Bank of England will mount a fresh charge at the enemy formations today. Coordination is the name of the game: it needs to keep on top of the huge amount of issuance – borrowing – by the UK government. Wartime levels of debt means the BoE must expand the envelope to hoover it up or risk yields starting to rise and spreads widening.

So, the BoE is expected to increase quantitative easing by at least £100bn, but I think it may well opt for £200bn, or even more, given that even £100bn would only last it until the end of the summer and the real long-term economic problems are going to emerge later in the autumn.

Interest rates will stay at 0.1% and expectations firmly anchored for the near future with forward guidance repeating that the Bank will do whatever it takes.

The FTSE 100 index and most other major European stock markets are sliding again, ahead of the Bank of England’s policy decision at noon. The UK’s blue-chip index has lost just under 9 points, or 0.14%, to 6,244. Germany’s Dax is down 0.4%, France’s CAC has shed 0.6% and Italy’s FTSE MiB is flat.

Sterling fell 0.6% against the dollar to $1.2480 ahead of the decision. There was a similar move versus the euro, to €1.1097.

The Swiss National Bank’s chairman Thomas Jordan said the central bank’s negative rates – the lowest in the world – are needed to help Switzerland get through its worst recession in decades.

He told a news conference that before the bank will consider a policy change,

we need more inflation and a much better economic outlook.

The SNB expects the Swiss economy to shrink by 6% this year, its worst downturn since the oil shock of the 1970s.

Like the Norges Bank, the Swiss National Bank left interest rates unchanged this morning, at -0.75%. But Norway’s central bank is closer to raising borrowing costs and has pencilled in a couple of rate hikes from zero to 0.5% by 2023.

David Oxley, senior Europe economist at the consultancy Oxford Economics, says:

The SNB’s policy rate is set to remain on hold well beyond the end of our two-year forecast horizon and, in all probability, until at least late in the decade.

The SNB is clearly reticent to avoid heaping more pressure on the banking sector and signs that European policymakers are getting their act together should allow the franc to ease back further over the coming years. All told, we expect foreign exchange interventions to remain the Bank’s weapon of choice to fend off bouts of upwards pressure on the currency.

The Bank of England is next with its policy decision at noon. It too is expected to leave interest rates unchanged, at 0.1%, but is likely to add to its bond-buying programme, known as quantitative easing, by at least £100bn, which would expand the programme to £745bn.

Greece’s unemployment rate fell to 16.2% in the first three months of the year, from 16.8% in the fourth quarter of 2019, according to the country’s statistics service ELSTAT.

Rather worryingly, nearly three-quarters of the 745,093 unemployed people have been out of work for at least 12 months. But unemployment is now far lower than it was during the Greek debt crisis, when it peaked at 27.8% in early 2014.

Somewhat surprisingly, the unemployment rate was 14.4% in March, the lowest since November 2010, despite the coronavirus pandemic. This is a different dataset and is seasonally adjusted (the quarterly figures are not adjusted for seasonal variations).

Greece’s economy contracted by 1.6% in the first quarter.

European stock markets have turned positive, but gains are limited by fears over the fresh surge in Covid-19 infections in the United States and Beijing.

• UK’s FTSE 100 up 0.12% at 6,260
• Germany’s Dax up 0.4% at 12,431
• France’s CAC 40 up 0.1% at 5,001
• Italy’s FTSE MiB up 0.5%% at 19,683

The Unfriend Coal / Insure Our Future campaign group is calling on insurers to end all support for new oil and gas projects, as it revealed that a quarter of the top companies in the sector have committed to a 1.5°C global warming target.

Unfriend Coal, which is now known as Insure Our Future, includes 18 environmental groups such as Greenpeace, 350.org and Oil Change International. Insurers have started pulling out of coal in recent years, partly due to pressure from the campaign group. It has now turned its attention to oil and gas projects.

Its research shows that out of the 15 biggest oil and gas insurers:

• Four are members of the Net Zero Asset Owners Alliance that have publicly backed the a 1.5°C global warming target: Germany’s Allianz, France’s AXA, Germany’s Munich Re and Switzerland’s Zurich.
• Seven have already limited support for fossil fuels by restricting insurance for coal: Allianz, AXA, Chubb, Liberty Mutual, Munich Re, The Hartford and Zurich.

The UN Intergovernmental Panel on Climate Change has warned that if global temperature increases are to be limited to 1.5°C, oil consumption must be reduced by 37% by 2030 and 87% by 2050. Gas consumption must fall by 25% by 2030 and 74% by 2050.

Oil Change International has found that CO2 emissions from the oil, gas and coal in existing fields and mines will push the world far beyond 1.5°C of warming.

Insure Our Future has written to the chief executives of 27 leading property & casualty insurers and three major insurance investors (Aviva, Legal & General and Teachers Insurance and Annuity Association of America), saying:

Insurers have a responsibility to support international climate targets and align their businesses with the Paris Agreement.

Covid-19 is irreversibly reshaping the energy and power sectors, and the massive disruption of the coal, oil and gas markets offers a great chance for insurance companies to reposition themselves for a lowcarbon future.

The reduced revenues from fossil fuel operations and the surge of renewable energy sources provide a perfect time for adopting or strengthening fossil fuel exit policies, divesting from fossil fuel companies not engaged in rapid decarbonization processes, and advocating for the shift away from fossil fuels as corporate citizens.

We’ve seen how quickly insurers have retreated from coal in the last three years – 19 now have limited coal insurance – so can we now expect this momentum to be continued in oil and gas? asked a spokesman for the campaign group.

Norway’s central bank has kept its main interest rate on hold, at a record low of zero. It said the economic outlook had improved more than expected in recent weeks.

Norges Bank slashed interest rates three times since March from 1.5%, to support the country’s economy through the coronavirus crisis. The oil-rich country has also been hit by the sharp fall in crude oil prices.

Since the monetary policy meeting in May, activity has picked up faster than expected. The policy rate forecast implies a rate at the current level over the next couple of years, followed by a gradual rise as economic conditions normalise.

The Norwegian economy, excluding oil and gas output, is forecast to shrink by 3.5% this year, better than the May forecast of a 5.2% drop, and is expected to bounce back with 3.7% growth next year.

Like Sweden’s central bank, Norges Bank issues forecasts for where interest rates will go, and is still predicting that rates will rise to 0.5% in 2023.

Unlike other central banks, Norges Bank can’t really do bond-buying (known as quantitative easing), because Norway’s debt market is small.

Taylor Wimpey, one of the UK’s big housebuilders, this morning announced the results of its share sale: it raised £522m (more than expected) after selling 355m new shares at 145p to institutional and other investors, including employees, as it looks to acquire more land at lower prices.

Michael Hewson, chief market analyst at CMC Markets UK, says:

Yesterday’s announcement that the company was looking to raise extra funds caught a lot of people by surprise, however management seem keen to avail themselves of a recent fall in land prices, in expectation of a pickup in the housing market a few years down the line.

Tesco is selling its Polish division to a Danish group for £181m as it continues to retreat from international markets to focus on the UK.

After struggling to gain market share in Poland, Britain’s biggest supermarket chain decided to offload its 301-strong store business there to Salling Group, the Danish owner of the Netto supermarket chain.

Tesco has already pulled out of Japan, South Korea, the US and Turkey in recent years. The latest sale leaves it with Ireland, the Czech Republic, Hungary and Slovakia as the only major operations outside the UK.

In case you missed this yesterday, Londoners can look forward to more al fresco dining soon – and pretend they are on holiday in the Med. A swathe of central London is to be transformed into a huge continental-style outdoor dining area under plans to keep bars and restaurants in business.

Westminister council is lining up 50 projects to make space for al-fresco dining including pavement widening and temporary road closures for part of the day in popular districts such as Chinatown, Covent Garden, Soho and Mayfair. Some small streets near Oxford Circus could also be closed for part of the day to accommodate tables.

Hopefully this will also happen in other cities such as Liverpool, Manchester and Birmingham, where the authorities are working on plans to pedestrianise streets or widen pavements to allow more space for outdoor tables.

National Grid is braced for a £400m hit to its operating profits in the current financial year as the coronavirus pandemic threatens to wipe up to £1bn from the company’s cashflows, reports our energy correspondent Jillian Ambrose.

The energy networks giant, which runs Britain’s energy system and operates gas networks in the US, reported a pre-tax profit of £1.75bn for last year, down 5% from the year before.

It warned investors that its results for the current financial year would take a hit due to lower levels of energy use during the pandemic lockdown, and higher levels of ‘bad debt’ from customers in the US.

John Pettigrew, National Grid’s chief executive, said the financial impact of Covid-19 will be “largely recoverable over future years” and that the company anticipates “no material economic impact on the Group in the long-term”.

The FTSE 100 energy giant expects only a modest dent to its future capital spending, which last year reached a record £5.4bn, and will recommend that the dividend for the year climbs to 48.57p, up 2.6%.