News

BoE Holds Rates
The Bank of England voted unanimously to keep its benchmark interest rate on hold at a record low of 0.1 percent and left its bond-buying programme unchanged during its February meeting. Policymakers noted it would be appropriate to start the preparations so that it could set a negative rate in 6 months, but stressed it should not be interpreted as a signal. The central bank also said that the coronavirus vaccine rollouts in a number of countries, including the United Kingdom, have improved the economic outlook, but voiced concerns about the recent increase in cases, including from newly identified strains of the virus, and the associated reimposition of restrictions.
Published on 2021-02-04

BoE to Report Details on Negative Rates
The Bank of England is expected to leave the Bank Rate at a record low of 0.1% and the size of its bond-buying program unchanged at £875 billion during its first meeting of 2021. However, investors will keep a close eye on BoE’s quarterly outlook and the result of a feasibility study of negative interest rates. The central bank is not expected to cut rates below 0% soon but the central bank will most likely not rule out their use in the future. Traders will also be looking for any updates on the near term outlook as the UK remains under a national lockdown. The bank will likely upgrade its forecasts for 2020 but downgrade forecasts for the year ahead.
Published on 2021-02-04

BoE Leaves Rates and Asset Purchases Unchanged
The Bank of England voted unanimously to maintain Bank Rate at a record low of 0.1% and the size of its bond-buying program at £875 billion during its December meeting, as policymakers took a wait-and-see approach amid uncertainty surrounding a post-Brexit trade deal and concerns over the coronavirus situation. Still, the central bank noted that the successful trialing of some Covid vaccines and initial plans to roll them out widely over the first half of next year will likely reduce the downside risks to the economic outlook. Looking ahead, officials pledged to take whatever additional action is necessary to achieve the 2% inflation target, in a way that helps to sustain growth and employment. CPI inflation is expected to rise quite sharply towards the target in the spring, as the VAT cut comes to an end and the large fall in energy prices earlier this year drops out of the annual comparison.
Published on 2020-12-17

BoE Seen Leaving Monetary Policy Steady
The Bank of England is seen taking a wait-and-see approach during its last monetary policy meeting of 2020 as it is still uncertain if there would be a post-Brexit trade agreement. Policymakers are expected to leave the benchmark interest rate at a record low of 0.1% and the bond-buying programme at £875 billion, after extending it by a larger-than-expected £150 billion in November. Still, investors will be looking for more guidance on this additional stimulus and any clues over how to implement negative interest rates as the key bank rate is likely to be cut to -0.1% next year.
Published on 2020-12-17

BoE Increases Bond-Buying
The Bank of England left its Bank Rate at a record low of 0.1% on November 5th 2020 and increased the size of its bond-buying program by a larger-than-expected £150 billion to £875 billion, as the country entered a new coronavirus lockdown. Policymakers noted that there has been a rapid rise in rates of Covid infection and the UK Government has responded by increasing the severity of Covid restrictions. Also, consumer spending has softened across a range of high-frequency indicators, while investment intentions have remained weak. The central bank sees the economy shrinking by 11% in Q4 2020, much worse than a 5.4% drop projected in August and to grow by a stronger 11% in Q4 2021. Inflation is expected higher at 0.6% in Q4 2020 (vs 0.3% in August) and the unemployment rate is seen lower at 6.3% (vs 7.5%). The key bank rate is expected to remain steady at 0.1% through the rest of 2020 but is likely to be cut to -0.1% next year.
Published on 2020-11-05

BoE Keeps Policy Steady, Considers Negative Rates
The Bank of England voted unanimously to maintain Bank Rate at a record low of 0.1% and the size of its bond-buying program at £745 billion during its September meeting. Policymakers noted that domestic economic data have been a little stronger than expected in August, while the outlook for the economy remains unusually uncertain due to the coronavirus pandemic and recent Brexit developments, leaving the door open to negative interest rates and more QE. CPI inflation is expected to remain below 1% until early 2021 and unemployment will probably remain elevated for some time. The central bank also said it does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.
Published on 2020-09-17

BoE to Hint at More Stimulus
The Bank of England will likely leave the bank rate at a record low of 0.1% on Thursday and the size of its bond-buying program at £745 billion. Still, the central bank is expected to set the stage for more stimulus measures as the country faces greater instability amid a no-deal Brexit concerns, rising unemployment and coronavirus infections. Many economists expect the bank to take concrete action only in November as the outcome from post-Brexit trade talks becomes more clear, and the UK’s furlough scheme ends.
Published on 2020-09-17

BoE Holds Rates, Says UK Recovery Will Take Longer
The Bank of England voted unanimously to maintain the key bank rate at a record low of 0.1% and the size of its bond-buying program at £745 billion as expected during its August meeting. Policymakers said Britain's economy will take longer to recover from the coronavirus-induced recession than initially thought and warned about the risks of cutting interest rates below zero. Meanwhile, the central bank said CPI inflation is expected to fall further below the 2% target, largely reflecting the direct and indirect effects of Covid-19.
Published on 2020-08-06

BoE Expands Bond-Buying as Expected
The Bank of England voted unanimously to maintain the key bank rate at a record low of 0.1% on June 18th 2020, in line with market forecasts. Policymakers also voted by a majority of 8-1 to increase the target stock of purchased UK government bonds, financed by the issuance of central bank reserves, by an additional £100 billion, to take the total stock of asset purchases to £745 billion. The programme is expected to be complete around the turn of the year. The central bank will continue with the existing programme of £200 billion of UK government bond and sterling non-financial investment-grade corporate bond purchases. Policymakers added that the fall in global and UK GDP in Q2 will be less severe than anticipated although the outlook remains unusually uncertain and the economy, and especially the labour market, will therefore take some time to recover. The central bank stands ready to take further action as necessary to support the economy, officials added.
Published on 2020-06-18

BoE Expected to Expand Bond-Buying Program
The Bank of England is expected to increase its asset-purchase program by at least GBP 100 billion on June 18th 2020, aiming to support the UK economy and ensure stability of financial markets. The additional stimulus would complement the GBP 200 billion announced in March when the coronavirus pandemic started, bringing total bond purchases to GBP 745 billion. At the same time, the central bank is seen extending the QE programme beyond July. Meanwhile, the bank rate is expected to be left at a record low of 0.1 percent. The Bank of England voted unanimously to maintain the key bank rate at a record low of 0.1% on May 7th 2020, in line with market forecasts.
Published on 2020-06-18

BoE Holds Rates, Stands Ready for Further Stimulus
The Bank of England voted unanimously to maintain the key bank rate at a record low of 0.1% on May 7th 2020, in line with market forecasts. Policymakers also left the bond buying program at £645 billion, although two members voted for a £100 billion increase, in a further sign that fresh stimulus may be under way. The central bank expects the GDP to contract by 14% in 2020 due to the coronavirus pandemic. The inflation rate is seen falling to 0.6% and unemployment is like to rise to 8%.
Published on 2020-05-07

BoE Holds Interest Rates at Record Lows
The Bank of England's MPC voted unanimously to hold the Bank Rate at an all-time low of 0.1 percent during its scheduled March meeting, with policymakers taking a wait-and-see approach to monetary policy after delivering two emergency cuts this month in response to the severe economic and financial disruption caused by the spread of Covid-19. The bank also said the UK GDP is seen falling sharply during the first half of the year and unemployment is likely to rise rapidly across the country. Policymakers pledged to take further action if needed to guard against an unwarranted tightening in financial conditions, and support the economy.
Published on 2020-03-26

BoE to Leave Monetary Policy Unchanged
The Bank of England is likely to hold interest rates at record lows on Thursday as policymakers take a wait-and-see approach to monetary policy after delivering two emergency cuts this month. Still, officials are seen reiterating they are determined to take further action to support the economy hurt by the Covid-19 crisis, with possible measures including a further increase in their quantitative easing programme. Governor Andrew Bailey and other policymakers have suggested they will not lower the Bank Rate into negative territory.
Published on 2020-03-26

BoE Cuts Rates to New Lows in Emergency Move
The Bank of England lowered the key interest rate to 0.1 percent at a special meeting on March 19th. It follows a 50bps cut last week, bringing borrowing costs to a fresh record low. The central bank said the spread of Covid-19 and the measures being taken to contain the virus will result in an economic shock that could be sharp and large, but should be temporary. The central bank also announced it will increase its holdings of UK government and corporate bonds by £200 billion.
Published on 2020-03-19

BoE Ready to Take Further Action Against Covid-19
The Bank of England is ready to take more "prompt action" against the impact of the coronavirus on Britain's economy, new Governor Andrew Bailey told BBC News in his first public appearance on Monday, March 16th. Bailey, who succeeded Mark Carney, said the central bank was "very keen" to ensure the damage to the economy will not permanently weighed on Britain's growth prospects in future. The Bank of England slashed interest rates by 50bps last Wednesday days ahead of a scheduled meeting, and launched emergency credit measures to support firms hurt by the Covid-19 pandemic.
Published on 2020-03-16

BoE Slashes Key Rate to 0.25%
The Bank of England unexpectedly cut the key interest rate by 50bps to 0.25% during an emergency meeting on March 11th. The central bank said the rate cut will help to support business and consumer confidence at a difficult time, to bolster the cash flows of businesses and households, and to reduce the cost, and to improve the availability, of finance. Although the timing of the decision was a surprise, markets were already pricing in a 25bps cut on March 26th. The central bank also announced a raft of other measures to bolster Britain's economy against disruption caused by the coronavirus outbreak, including a new funding scheme with additional incentives for small and medium-sized enterprises financed by the issuance of central bank reserves and more funding for banks that increase lending, specially to SMEs. Policymakers also decided to maintain the stock of corporate bond purchases at £10 billion and the stock of UK government bond purchases at £435 billion.
Published on 2020-03-11

BoE to Act in Coordinated Way with Treasury
The Bank of England and the Treasury will likely work together in providing financial support to companies struggling with disruption caused by the virus outbreak, incoming Bank of England Governor Andrew Bailey told Britain's parliament on Wednesday, March 4th. Bailey, who is set to replace Mark Carney on March 16th, also suggested the central bank should wait for more clarity about the impact of the rapid spread of the virus on businesses and demand before cutting rates. Carney had already told lawmakers on Tuesday it was reasonable to expect a "powerful and timely" response that reflects a combination of fiscal measures and central bank initiatives. In January, the Bank of England held Bank Rate at 0.75 percent and markets are pricing in a 25bps rate cut when policymakers meet on March 26th.
Published on 2020-03-04

BoE Ready to Act to Support Growth
The Bank of England will take all necessary steps to support the UK economy as the coronavirus outbreak hurts global growth, Bank of England Governor Mark Carney told Britain's parliament on Tuesday. The governor also said that policymakers around the world were working together to limit the impact of the rapid spread of the virus on their economies, and that it was reasonable to expect a "powerful and timely" response that reflects a combination of fiscal measures and central bank initiatives. Still, Carney noted that the committee will only make a decision at the appropriate time but not before. In January, the Bank of England held Bank Rate at 0.75 percent and revised down GDP forecasts for 2020, 2021 and 2022.
Published on 2020-03-03

BoE Interest Rates to Remain Low
Britain's interest rates are likely to be relatively low for some time, and any upward adjustment would be only “modest”, Bank of England Governor Mark Carney told the House of Lords on Tuesday. The Governor also said that the economy would benefit from more investment from both the public and private sectors. He also noted that the lack of investment in recent years and the prospect of some reorganisation of the economy as Britain and the EU build a new relationship could weigh on short-term productivity. Regarding the coronavirus, Carney said that pandemics usually have quite significant impacts on global growth but much of it is recovered in subsequent quarters.
Published on 2020-02-11

BoE Holds Rates a Day Before Brexit
The Bank of England's MPC voted by a majority of 7-2 to hold Bank Rate at 0.75% during its January meeting, with policymakers taking a wait-and-see approach as Britain prepares to leave the EU while the latest economic data has been encouraging. Policymakers expect UK GDP growth to accelerate in early 2020 supported by a pickup in global activity, a further decline in Brexit uncertainties and government’s announced spending measures, and inflation is seen remaining below the 2% target until at least 2021. Still, officials revised down GDP forecasts for 2020 full year to 0.8% (vs 1.2% previously estimated), before accelerating to 1.4% in 2021 (vs 1.8%) and 1.7% in 2022 (vs 2.0%). The central bank also said that interest rates may need to be cut if growth does not improve, or they could be raised "modestly" in future if the economy recovers in line with latest projections and inflation picks up. It was the last meeting chaired by Governor Carney before Andrew Bailey takes over in March.
Published on 2020-01-30