Bank of England (BoE) news

Banks news

  • 20 October 2020, 09:40
    Bank of England policymaker Vlieghe: It appears downside risks are starting to materialise

    • Not yet at a point where we can reach a conclusion on negative rates

    • There is a risk that negative rates end up being counterproductive

    • Outlook for monetary policy is skewed towards adding further stimulus

    • QE is probably less potent now than in March

    • Risks are skewed towards even larger job losses

    • Difficult to see a scenario where all furlough workers are reintegrated seamlessly

    • The speed of the recovery is likely to be slower while the virus remains a concern

  • 22 September 2020, 08:03
    BOE governor Bailey: UK recovery has been quite rapid, substantial, but below the surface, the recovery is very uneven

    • UK recovery in Q3 is a little bit ahead of expectations

    • The economy can be viewed as glass half-full or half-empty

    • Labour demand is weak, unemployment is higher than reported number

    • Investment is also very weak, but housing market is strong

    • We will do everything we can to support the UK economy

    • We have looked very hard at scope to cut rates further

    • That includes negative interest rates

    • Concluded that negative rates should be in the toolbox

    • We do not intend to take any action to tighten policy until there is very clear evidence of significant progress to achieve 2% inflation target sustainably

    • Like the Fed, BOE is flexible in returning inflation back to its target

  • 4 September 2020, 09:58
    Bank of England policymaker Saunders It is likely that additional easing will be appropriate

    • The economy’s faster-than-expected rebound in the last few months has reflected a benign window in which large fiscal support has coincided with the relaxation of lockdown measures and low infection rates. This window may now be closing.

    • Unemployment is likely to rise significantly in coming quarters as the furlough scheme winds down and workforce participation recovers.

    • The strength in money growth is an indication of the exceptional level of fiscal and monetary policy support in recent months. It is unlikely to translate into excess spending given the economic impact from Covid-19.

    • Looking forward, I suspect that risks lie on the side of a slower recovery over the next year or two and a longer period of excess supply than the forecast in the August MPR. 

    • If these risks develop, then some further monetary loosening may be needed in order to support the economy and prevent a persistent undershoot of the 2% inflation target.

  • 7 August 2020, 09:19
    BOE policymaker Ramsden: Debt, higher borrowing was a necessary response to the pandemic

    • Yields in the gilt market are extraordinarily low

    • Trends over many years have pushed down rates

    • We are not actively planning for negative rates

    • We are using tried and test policies such as QE

    • Important to stress that negative rates are now in the toolbox

    • Financial structure is a key conditionality for negative rates

    • BOE can support the transition by keeping rates low

  • 22 June 2020, 06:50
    BOE Governor Andrew Bailey: Would shrink balance sheet before raising rates in future

    • Massive programme of asset purchases has been the right thing to do.

    • Central bank independence should not be called into question by COVID-19.

    • Financial system mustn’t become reliant on these extraordinary levels of central bank reserves.

    • Current scale of central bank reserves mustn’t become a permanent feature.

    • Elevated balance sheets could limit the room for manoeuvre in future emergencies.

    • As economies recover, it’s likely that some of the exceptional monetary stimulus will need to be withdrawn, including by reducing reserves.

  • 12 May 2020, 09:19
    Negative rates in the UK ‘quite possible,’ BOE deputy governor says

    CNBC reports that according to Deputy Governor for Monetary Policy Ben Broadbent, the U.K. may be headed toward negative interest rates at impending Bank of England monetary policy meetings.

    The BOE's Monetary Policy Committee (MPC) voted to hold interest rates at a historic low of 0.1% last Thursday, having cut rates twice from 0.75% since the start of the coronavirus pandemic.

    "The committee are certainly prepared to do what is necessary to meet our remit with risks still to the downside," Broadbent told CNBC on Tuesday.

    "Yes, it is quite possible that more monetary easing will be needed at the time."

    Along with the two previous rate cuts, the Bank has also announced £200 billion of new quantitative easing, bringing its bond buying program to a total of £645 billion.

  • 7 May 2020, 09:08
    BOE governor Bailey: We are not out of monetary policy tools

    • We will continue to come up with appropriate responses

    • BOE is clearly committed to take action when needed

    • Appropriate that BOE continues with aggressive pace of QE for the moment

    • We will take stock of that, there's still another meeting before QE completion

    • Information about lifting lockdown measures will be material to June discussions

  • 7 May 2020, 06:15
    Bank of England leaves bank rate unchanged at 0.10%

    • The Bank of England's Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. In that context, its challenge is to respond to the severe economic and financial disruption caused by the spread of Covid-19.

    • At its meeting ending on 6 May 2020, the MPC voted unanimously to maintain Bank Rate at 0.1%.

    • The Committee voted by a majority of 7-2 for the Bank of England to continue with the programme of £200 billion of UK government bond and sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, to take the total stock of these purchases to £645 billion.

    • Two members preferred to increase the target for the stock of asset purchases by an additional £100 billion at this meeting.

    • The spread of Covid-19 and the measures to contain it are having a significant impact on the United Kingdom and many countries around the world.

    • Activity has fallen sharply since the beginning of the year and unemployment has risen markedly.

    • Economic data have continued to be consistent with a sudden and very marked drop in global activity.

    • Oil prices have been volatile.

    • There have, however, been tentative signs of recovery in domestic spending in China, and this is likely to be echoed in other countries that have started to relax Covid-related restrictions on economic activity.

    • Financial markets have recovered somewhat over recent weeks and risky asset prices have picked up from their lows in mid-March. This in part reflects the actions taken by authorities in the United Kingdom and elsewhere. Global financial conditions have, nevertheless, remained tighter than prior to the outbreak of Covid-19.

    • The timeliest indicators of UK demand have generally stabilised at very low levels in recent weeks, after unprecedented falls during late March and early April.

    • Payments data point to a reduction in the level of household consumption of around 30%.

    • Consumer confidence has declined markedly and housing market activity has practically ceased.

    • CPI inflation declined to 1.5% in March and is likely to fall below 1% in the next few months, in large part reflecting developments in energy prices.


    GBP/USD jumps to 1.2380 post-BoE announcement.
  • 15 January 2020, 09:00
    BOE's Saunders: Aggressive steps needed given limited monetary policy space

    • Growth has slowed markedly over the last year, both overseas and here.

    • In the UK, the economy has barely grown since the first quarter of last year and the YoY growth in GDP has fallen below 1% for the first time since 2012

    • It probably will be appropriate to maintain an expansionary monetary policy and also to possibly cut rates further

    • Neutral level of interest rates may have fallen further over the last year or two

    • Monetary policy space is limited

    • Risk considerations favour a relatively prompt, aggressive response to downside risks

    • Most likely outlook is a further period of subdued growth

    • Brexit uncertainty may continue, weigh further on the economy

  • 10 January 2020, 10:40
    BoE's Tenreyro inclined to back rate cut if risks emerge

    Bank of England policymaker Silvana Tenreyro said she will be inclined to vote for a cut in interest rates, if the economy does not pick up this year as the central bank forecast in November.

    The BoE's forecasts assumed that the Britain would move towards a deep free trade agreement with the EU this year, and that the recent global economic uncertainty quickly unwound.

    "The risks to these assumptions are largely to the downside," Tenreyro said in a speech at the Resolution Foundation think tank in London.

    "If uncertainty over the future trading arrangement or subdued global growth continue to weigh on demand, then my inclination is towards voting for a cut in Bank Rate in the near term," she continued.

  • 9 September 2019, 09:39
    BOE policymaker Vlieghe: Interest rates likely to stay lower for years

    • Structural forces unrelated to monetary policy are likely to keep rates low

    • BOE unlikely to be able to cut rates as it did in the previous downturn

    • BOE analysis rules out taking rates into negative territory

    • Does not believe that a recession is overdue

    • Not much room for the UK gilt yields to fall much further, so more QE unlikely to provide much more stimulus.

    • BOE firepower is less than before previous recessions.

    • If you change BOE 2% inflation target, could create higher perceived risk that it will be changed again in future.

    • Helicopter money could put central bank independence at risk.

  • 13 May 2019, 08:09
    BoE Deputy Governor Broadbent: Doesn't know which way rates would go in case of a messy no-deal Brexit

    • delay in Brexit deadline to October will have a negative impact on investments.

    • Investment already feeling the consequences of uncertainty.

    • If Brexit deal is struck, there could be quite a strong rebound in investment.

    • any BOE rate hikes will be gradual.

    • Haven't decided whether to apply to succeed Carney as BoE Governor.

  • 9 May 2019, 09:19
    BOE MPC member Saunders: Sterling would probably fall after no-deal Brexit

    • UK has missed out on 2-3 year of business investment on Brexit

    • smooth Brexit transition would probably boost investment

    • Brexit deal would help economic outlook

    • series of repeated Brexit cliff edges could cause investment to be subdued for a while

    • UK real incomes have picked up in past year

    • UK neutral rate is a lot lower than in the past

    • estimates neutral rate is about 2%

    • I would expect interest rates will go a bit higher over time, but it won’t be far of fast

1 / 13

All information on the website is for informational purposes only and does not constitute a basis for making certain investment decisions. Please read our full risk notification.

© 2000-2020. All rights reserved.

This site is managed by Teletrade D.J. Limited 20599 IBC 2012 (First Floor, First St. Vincent Bank Ltd Building, James Street, Kingstown, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Feedback
Live Chat E-mail
Up
Choose your language / location