BOE warns of near-term squeeze on consumers as result of Brexit

The Bank of England has warned households that living standards will fall this year as the effect of the Brexit vote works its way through to higher prices and meagre pay deals. Presenting a sober assessment of the economic outlook just weeks before the general election on 8 June, the Bank’s governor Mark Carney predicted living standards could start to recover in 2018 but , in the meantime, inflation would be higher than pay growth this year making it a “more challenging time” for households…

UK’s MPs to question Carney about BOE’s policies, but the problem is austerity

Next year promises a return to low growth, rising inflation and painful decisions about what to buy in the weekly shop as disposable incomes are squeezed. Not since 2012 will the British have felt the strictures that come with a faltering economy – should the forecasts come to pass. In previous decades the public might […]

BOE’s not going to take instruction on policies from the political side, says Carney

The Bank of England will not take instructions on its policies from politicians, its governor, Mark Carney, has said, just a week after Theresa May took a swipe at the impact of the Bank’s actions on “ordinary” people. Speaking at Birmingham town hall as part of the Bank’s Future Forum event on Friday, Carney said it became difficult for the Bank when politicians commented on its policies rather than its objectives…

BOE says likely to cut interest rates to just above zero later this year

The Bank of England said on Thursday it was still likely to cut interest rates to just above zero later this year, even though the initial Brexit hit to Britain’s economy was proving less severe than it had predicted only last month. The BoE’s rate-setters voted unanimously to keep Bank Rate at 0.25 percent, the […]

An U.S. interest rate hike could provoke a new crisis for the BOE

When the drugs stop working, try a different one or increase the dose. Most central bankers are well aware that their black bag of monetary medicine is running short of remedies to overcome the continuing aftershocks of the 2008 crash. Brexit is the latest seismic convulsion. And the Bank of England duly handed out the financial equivalent of blue, yellow and pink pills to soothe the fevered brows of consumers and businesses alike…

BOE’s bond-buying failure suggests monetary policy won’t be enough to boost growth

The activities of the Bank of England in the City’s gilts’ market tend to be for the initiated only. This week, though, they have become rather like archery or trap shooting: fascinating when the Olympics roll round. So it was that the markets were agog on Wednesday to see whether Threadneedle Street would be able to attract enough sellers for the bonds it wanted to buy as part of its post-Brexit stimulus package…

BOE’s post Brexit plan stumbles as £1.17bn long-dated gilts buy back falls short

The Bank of England’s post-Brexit economic recovery plan got off to a stumbling start when it was unable to buy as many government bonds as it needed from major City investors. Threadneedle Street will spell out on Wednesday how it plans to get reluctant investors to part with government bonds – also known as gilts – in order to provide additional stimulus to the economy under its new £60bn quantitative easing (QE) programme…

Brexit or no Brexit, BOE will let pound fall due to large trade deficit

Brexit or no Brexit, it has been clear for months that the only way for the pound was down. When a country is running a balance of payments deficit unsurpassed in peacetime history, it is hard to make a compelling case for its currency going up. In truth, all the referendum vote on 23 June has done is to bring forward the fall in sterling and squeeze it into a shorter period. Following the latest set of poor trade figures, the pound looked as if it might test its post-referendum low against the dollar, but it later recovered to close above the $1.30 level…

BOE cuts rates to 0.25% as expected, to buy $79bn in government bonds

The Bank of England swung into action on Thursday against the economic shock from Britain’s vote to leave the European Union, cutting interest rates to near nothing and unleashing billions of pounds to cushion the Brexit blow. In what one bank dubbed a “sledgehammer stimulus”, the BoE cut interest rates 25 basis points to 0.25 percent and said it would buy 60 billion pounds ($79 billion) of government bonds with newly created money over the next six months…

BOE report shows UK economy has been resilient, no signs of slowing down since Brexit vote

Theresa May’s new administration has received a significant boost from a Bank of England report showing that the economy has been resilient in the first few weeks since the Brexit vote and displays no general signs of slowing down. The monthly survey by the Bank’s regional agents – considered to be the “eyes and ears” of policymakers in Threadneedle Street…

BOE holds rates at 0.5%, QE unchanged despite collapse in business, consumer confidence

The Bank of England has held interest rates at 0.5%, confounding City analysts who expected a recent collapse in business and consumer confidence to convince policymakers to support the economy and cut the cost of credit. By an 8-1 vote, the Bank’s monetary policy committee also refused to contain the economic fallout from the Brexit vote by expanding its £375bn quantitative easing scheme…

BOE buffer could absorb the shock of Brexit but growth is the problem

The first element in the Bank of England’s post-Brexit operation was obvious. Banks will be told to use their capital buffers for the purpose for which they were intended – to absorb shocks. It will have required no genius, or even lateral thinking, on the part of the Bank’s financial policy committee to reach this decision. The financial system established after the crisis of 2008-09 is designed to flex in emergencies…

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