Bank of England

  • 2020-07-01 09:09

    -Haskel: Risks To Downside Of BOE Economic Scenario

    LONDON (MNI) - The UK's economic balance of risks are currently to the downside, but policy remains appropriate, Bank of England Monetary Policy Committee member Jonathan Haskell said Wednesday, noting that the BOE was looking into the fragmented pass through from its recent cutting of benchmark rates to 0.1%.

    "I believe the current stance of monetary policy is appropriate but, on balance, risks are to the downside," he said.

    He said that if there was a second Covid wave the Bank would respond to the economic consequences but that it had already built consumer caution, in part due to health fears, into its latest projections.

    Haskel said that at the June meeting he "readily joined the majority of

  • 2020-06-29 11:42

    --BOE's Vlieghe-Fiscal Consolidation Would Depress Real Interest Rates Further

    LONDON (MNI) - The real equilibrium interest rate may have fallen and could head lower still, Bank of England Monetary Policy Committee member Gertjan Vlieghe said on Monday.

    Vlieghe's comments imply that the Monetary Policy Committee, even when it gets round to tightening, may not have to hike to hit the equilibrium, and he warned that fiscal consolidation following the Covid-19 hit could push down on real rates, as could increased income and wealth disparities.

    In a question-and-answer session following a University of York event Vlieghe said fiscal consolidation was more likely to weigh on growth in demand and consumption, and "would depress real rates relative to the situ

  • 2020-06-09 13:29

    --Sees Challenges Moving To Negative Interest Rates
    --Has Long Warned Financial Sector To Prepare For No Deal Brexit

    LONDON (MNI) - Taking Bank Rate into negative territory would likely be a drawn out and complex procedure, rather than something the Bank of England's Monetary Policy Committee could adopt swiftly, Deputy Governor Jon Cunliffe said Tuesday.

    In a question and answer session following his speech to the Investment Association, Cunliffe said that while a negative Bank Rate was a policy tool that the Monetary Policy Committee could use, the Bank would want to complete analytical work before proceeding with the complex operational work that would be required to implement it.

    --With Bank Rate at 0.1% Cunliffe, asked about the possibility of taki

  • 2020-05-18 12:43

    -Specific Financial Issues For Setting Negative Rate In UK

    LONDON (MNI) - Every policy option is on the table for the Bank of England, said Monetary Policy Committee member Silvana Tenreyro, adding that she thought negative interest rates had been successful in continental Europe.

    The MPC so far has cut Bank Rate to 0.1% but has not taken the further step of going negative.

  • 2020-05-15 12:35

    -Posen Tells Lawmakers Sterling Less A Risk Than He Thought

    LONDON (MNI) - Former Bank of England Monetary Policy Committee member Adam Posen told lawmakers that he had feared investors would avoid sterling assets under pressure from Brexit and other uncertainties, but the Bank of England's credibility has been key in supporting the currency and keeping investors on board.

    Posen endorsed the MPC's reluctance to set a negative policy rate and he said that if the MPC could do what it wanted with quantitative easing it should continue to do so.

    The following are points from testimony by Posen and others, including National Institute of Economic and Social Research head Jagjit Chadha, to the TSC Friday:

    -Posen, asked if the BOE was doing a good job, s

  • 2020-05-14 09:14

    -Bailey Says Hard To See How Debt Can Be Inflated Away: CPI Heads To Zero -No Tight Monetary Financing Definition; Not Contemplating Negative Rates

    LONDON (MNI) - Bank of England Governor Andrew Bailey downplayed the debate over whether the BOE was engaged in monetary financing, but acknowledged that it was helping smooth government borrowing.

    In a broadcast interview at a Financial Times event, Bailey was dismissive of the idea that debt could be inflated away, with the Bank continuing to pay interest on reserves rather than providing free funding and with the outlook for low inflation.

    Following are key points from Bailey's question and answer session:

    -Asked if the Bank was carrying out monetary financing Bailey said "There isn't really a subtl

  • 2020-05-12 10:55

    -Broadbent Not Expecting Entrenched Deflation; Sub-zero End 2020 Plausible

    LONDON (MNI) - UK inflation could dip below zero at the end of this year and into early 2021, Bank of England Deputy Governor Ben Broadbent said on Tuesday, although he added that he did not expect entrenched deflation.

    In a business briefing, Broadbent also said that, at first glance, the changes to the Job Retention Scheme unveiled Tuesday by Treasury head Rishi Sunak were broadly in line with the assumptions made in the economic scenario published by the Bank last week.

    The following are points from the briefing:

    -Asked about the likelihood of headline inflation turning negative, Broadbent noted that in the economic scenario contained in last week's Monetary Policy Repor

  • 2020-05-07 02:27

    -Seven-to-Two Vote For Unchanged QE; Haskel, Saunders Dissent

    LONDON (MNI) - The Bank of England Monetary Policy Committee left policy unchanged Thursday, confounding some expectations of an increase in the size of its asset purchase programme.

    The MPC split seven-to-two over the decision to leave the asset purchase target at GBP645 billion, with two members voting to raise it by GBP100 billion, and all nine backing leaving Bank Rate on hold at 0.1%.

    The following are key points from the minutes and policy decision:

    -Jonathan Haskel and Michael Saunders both voted to increase total quantitative easing to GBP745 billion.

    Their argument in favour of the GBP100 billion increase relied on timing. They took the view that the Bank should make clea

  • 2020-04-23 07:36

    -Vlieghe: BOE Balance Sheet Expansion Shouldn't Unleash Inflation

    LONDON (MNI) - The UK runs the risk of a U-shaped recovery once coronavirus restrictions are lifted, Bank of England Monetary Policy Committee member Gertjan Vlieghe said on Thursday.

    In a question and answer session following a speech on the BOE's balance sheet, Vlieghe followed MPC colleagues in downplaying hopes of a sharp bounce-back once the pandemic eases.

  • 2020-04-15 13:27

    -Woods Reveals BOE's Commercial Paper Facility Lending Heavily

    LONDON (MNI) - Stress tests show UK banks could withstand the surge in unemployment projected by the Office for Budget Responsibility, the Bank of England's Deputy Governor for Prudential Regulation Sam Woods said on Wednesday.

    Woods spoke to the Treasury Select Committee the day after the OBR, the fiscal forecaster, published an alarming scenario showing a 35% quarterly fall in GDP in the second quarter and unemployment rising to 10% as a result of the coronavirus hit. Woods said the jobless rise was in line with the one in the Bank's 2019 stress tests which the banks passed.

    "The OBR put this forward as one scenario and there is a lot of uncertainty, but it is not implausible ..