This is a surprise - and a good one. Here in the UK we're all locked down again on a cold Mud Island, urging on vaccination at top speed. It is natural to assume, to fear, that this second wave lockdown is having the same catastrophic impact on national finances as the first. But it isn't - there is a massive difference. During the first lockdown Bank of England rushed to finance emergency measures, from hoovering up government bonds to financing the various schemes to keep credit markets open to business. By mid-April, Bank of England's buying of govt bonds and other covid-related support schemes was running at just under a stunning £80bn on a 4wk basis. The frenzy moderated after the pandemic retreated, but tween July and September, buying was still running at £20-30bn every four weeks.
The real surprise is that Bank of England isn't indulging the second wave in the same way. In the 4wks to yesterday, BOE buying sank to just $4.36bn.
Yes, there's almost certainly seasonal factors are helping to keep the numbers down - this time last year this asset tally was shrinking by £2.1bn. But thje bigger story is that Bank fo England itself seems to have taken a financial vaccination and it's working.
