Bank of England

British Interest Rate Hike

August 4, 2022

The Bank of England’s 50-basis point interest rate hike to 1.75% also matched expectations, but the decision was not a unanimous one. Committee member Tenreyro preferred an increase of 25 basis points, the size of the previous four increases done in February, March, May and June. The Bank of England’s initial rate hike last December […] More

Marking Time Ahead of Friday’s U.S. Employment Situation Report… Bank of England Projects Recession

August 4, 2022

The dollar edged 0.1% lower against the euro, Swiss franc, and on a weighted DXY basis. The dollar also fell 0.5% versus the New Zealand dollar and 0.3% relative to the Australian dollar. There was no net dollar movement overnight versus the Japanese yen, Chinese yuan or Canadian dollar. The weakest major currency has been […] More

Split Vote at Bank of England

June 16, 2022

In the wake of the Fed’s larger rate hike, some analysts had speculated that the Bank of England’s scheduled policy review yesterday and today would result in a bigger rate increase than the four previous 25-basis point moves, and three of six policymakers voted for a 50-bp hike, but the majority stuck with an incremental […] More

Comparing the Central Bank Interest Rate Paths of the United States, Brazil, U.K., Iceland,Poland and Czech Republic

May 5, 2022

All six of the central banks in this comparative study had interest rate hikes announced either today or yesterday. In none of the cases was the increase the first one of the current cycles. All these tightening cycles represent responses to accelerating inflation caused in large part by external factors like the pandemic, policy responses […] More

Following the Fed’s Lead to an Extent

May 5, 2022

Wednesday saw a post-FOMC rally in U.S. equities and commodity prices but a drop in the dollar and 10-year Treasury yield. The 50-basis point interest rate hike and the details regarding Fed balance sheet reduction were aligned with market expectations, but Powell’s press conference was more dovish than expected, especially his quelling of the possibility […] More

Bank of England Tightens as Expected, and More Moves Lie Ahead

March 17, 2022

The Bank of England as expected engineered a 25-basis point increase in its Bank Rate, but the 8-1 vote included a dissent in favor of a 50-basis point increase. The rate had previously been raised by 15 basis points in December and 25 bps in February, and at 0.75% is now back to its pre-pandemic […] More

Inflation and Russian Invasion of Ukraine Casting Longer Shadows

March 17, 2022

Equities behaved in a widely diverse way overnight after the Fed enacted the first of many rate hikes. Share prices closed up by 7.0% in Hong Kong, 3.5% in Japan, 3.0% in Taiwan, 1.8% in India, 1.7% in China, and 1.1% in Australia. But stock markets so far are down this Thursday by 1.0% in […] More

Rate Hike at the Bank of England

February 3, 2022

After a scheduled meeting of the Bank of England Monetary Policy Committee, the BOE Bank rate was doubled to 0.5%. The increase follows a 15-basis point hike in December and lifts the rate level to its highest point since March 2020. The 25-basis point size of today’s hike was as analysts expected but accompanied with […] More

Omicron, Central Banks, ISIS, Metaverse, OPEC, Russia, Inflation and January PMIs Vying for Market’s Attention

February 3, 2022

The top leader of ISIS and his family have died after a U.S.-led raid in Syria. Geopolitical tensions between the U.S. and Russia remain very high. A total of 3,623 Covid-19 deaths yesterday in the United States were the greatest single-day total in a year. Omicron affected numerous service-sector and composite purchasing manager surveys reported […] More

Bank of England Raises Bank Rate by 15 bps to 0.25%

December 16, 2021

The Bank of England’s nine-person Monetary Policy Committee lifted the bank rate by 15 basis points to 0.25% in an 8-1 decision and indicated that modest further increases will probably be needed in 2022. Today’s move was somewhat controversial insofar as Britain is being hammered by the rapidly spreading Omicron Variant and now undergoing renewed […] More