Bank of England

May 7, 2020

The Bank of England kept its monetary policy settings as is. Two reductions of the Bank Rate were earlier made of 50 basis points on March 11 and 15 bps a week later. The rate is now pinned at 0.1%. A released statement foresees consumer spending falling about 30%, and business investment dropping even more sharply. Inflation is below the 2% target and seen falling below 1.0% in the second half of this year before turning gradually upward. There was also a vote to continue asset purchases with a limit of GBP 645 billion, but it was not unanimous. Two of nine policymakers wanted to increase the limit ot GBP 745 billion. For now, officials consider policy settings appropriate, but they are prepared to do further stimulus if needed.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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