News

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

BoE to Hold Rates at Carney's Last Policy Meeting
The Bank of England will announce its monetary policy decision later in the day as Britain prepares to leave the European Union on January 31st, with latest forecasts pointing to a 5-4 vote to keep interest rates on hold. Still, financial markets priced in a 49 percent chance that policymakers would cut Bank Rate by 25bps as the latest economic data paints a mixed picture. Britain's economy grew at the weakest annual pace since 2012 in November, while the job market remains strong and business confidence rebounded following PM Johnson victory in December's election.
Published on 2020-01-30

BoE Keeps Rates Steady amid Cautious Approach
The Bank of England's Monetary Policy Committee voted by a majority of 7-2 to hold Bank Rate at 0.75 percent during its December meeting, as policymakers took a wait-and-see approach following Prime Minister Boris Johnson's election victory and its possible implications on Brexit. Two members have voted for a second month in a row for a rate cut amid concerns about the job market.
Published on 2019-12-19

UK Banks 'Resilient' to No-deal Brexit: 2019 Stress-Test
Major UK banks are strong enough to carry on lending to households and businesses even in a recession worse than the financial crisis, according to Bank of England's stress test results.
Published on 2019-12-16

BoE Holds Rates, 2 MPC Members Vote for Rate Cut
The Bank of England's Monetary Policy Committee voted by a majority of 7-2 to hold Bank Rate at 0.75 percent during its October policy meeting, while markets had forecast a unanimous decision, amid Brexit uncertainties and global trade wars. Also, the bank lowered its GDP forecasts, which now point to 1 percent expansion by the end of this year, 1.6 percent by the end of 2020, 1.8 percent by the end of 2021, and 2.1 percent by the end of 2022. Policymakers noted that monetary policy could respond in either direction to changes in the economic outlook in order to ensure a sustainable return of inflation to the 2 percent target.
Published on 2019-11-07

BoE Leaves Monetary Policy Unchanged
The Bank of England's Monetary Policy Committee voted unanimously to hold the Bank Rate at 0.75 percent during its September policy meeting, as widely expected. The bank also reaffirmed its pledge to gradual and limited rate rises in the event of greater clarity that the economy is on a path to a smooth Brexit, and assuming some recovery in global growth.
Published on 2019-09-19

BoE Holds Rates, Reaffirms Pledge to Gradual Hikes
The Bank of England's Monetary Policy Committee voted unanimously to hold the Bank Rate at 0.75 percent during its August policy meeting, and reaffirmed its pledge to gradual and limited rate rises under the assumption of a smooth Brexit and some recovery in global growth. Still, the central bank lowered its GDP forecasts for 2019 and 2020 on the back of slower export growth and weak business investment.
Published on 2019-08-01

BoE Holds Rates, Cuts Q2 Growth Forecast
The Bank of England's Monetary Policy Committee voted unanimously to hold the Bank Rate at 0.75 percent during its June policy meeting and reaffirmed its pledge to gradual and limited rate rises over the forecast period, despite ongoing Brexit concerns and global trade tensions. The central bank lowered its outlook for the economy to zero in the second quarter of the year from its previous estimate of 0.2 percent growth.
Published on 2019-06-20

BoE Leaves Monetary Policy Unchanged
The Bank of England's Monetary Policy Committee voted unanimously to hold the Bank Rate at 0.75 percent during its May policy meeting and reaffirmed its pledge to gradual and limited rate rises over the forecast period, despite the slowdown in global growth and ongoing Brexit uncertainties.
Published on 2019-05-02