Bank of England Expands Quantitative Stimulus

June 18, 2020

The Bank of England by a vote of 8-1 increased its asset buying ceiling from GBP 645 billion to a new level of GBP 745 billion. The Monetary Policy Committee members expect to hit that ceiling by the end of 2020. The program was raised back on March 19 by GBP 200 billion from a previous ceiling of GBP 445 billion total of gilt securities and non-financial investment-grade corporate bonds. The Bank rate was left unchanged today at 0.1%, having been cut twice during March, first by 50 basis points on the 11th and then by 15 bps a week later. Officials in a released statement characterized the economic situation as “unprecedented” but conceded that GDP this quarter probably will not contract quite as sharply as assumed in the May quarterly Inflation Report.  The latest on-year CPI inflation rate is 0.5% and likely will dip into the red for a while.

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

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