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UK: BOE has offered its first pandemic rise to curb rising prices | Business and Economic Affairs

Bank of England raised its interest rate by 15 basis points to 0.25 percent.

Author Bloomberg

The Bank of England raised interest rates for the first time since the outbreak, setting aside the UK financial risk posed by coronavirus cases to become the largest bank to take the rise in inflation.

Officials led by Governor Andrew Bailey voted 8-1 to raise interest rates by 15 points to 0.25%, giving a boost that no other Central Bank Group has ever made since the crisis began. Silvana Tenreyro is the only opposition. Proponents of her case have been working to make the actual transcript of this statement available online.

Pounds rose to 0.8% while UK yields over 10 years jumped five points after the election. Traders are now seeing the BOE’s target price rise to 1% by September.

The U.S. Federal Reserve has already set a hawkish tone on the eve of the BOE’s announcement of a three-pronged rise next year and has accelerated its decline in its stimulus program, while Norway continued its strengthening on Thursday with a second increase this year.

The BOE’s rapid transformation into a solid solution surprises many financial analysts who do not expect it to remain stable, as well as investors who buy prices with about 40% chance of moving. The result was a second consecutive one that came as a shock after November’s decision not to touch the financial markets wrongly.

The BOE’s rise is in response to a sharp rise in inflation, and this week’s report shows that inflation jumped to 5.1% in November – more than double what the central bank had demanded – as well as a special report on Tuesday.

With this in mind, Goldman Sachs Group Inc. Europe’s Chief Economist Jari Stehn told Bloomberg Television a few hours earlier that the effect of the change was not “action,” although it was his main hope.

The idea of ​​moving here is astounding as the country is in the grip of a new wave of coronavirus led by other species of infectious omicron, which has exacerbated daily casualties in the UK since the outbreak began.

The danger posing to the growing health crisis in the country is that the government of Prime Minister Boris Johnson has put in place additional measures to reduce work, which could be done in the coming days and weeks if the epidemic cannot be eradicated.

On the move now, the BOE heeded a warning this week from the International Monetary Fund, which warned of a policy failure on inflation.

This increase is the first from the BOE since 2018 and comes just days after major executives complete their plan to reduce the incidence of the epidemic. The acquisition has left central banks with government bonds at £ 875 billion ($ 1.2 trillion), up from £ 435 billion before the crisis.

Central has only increased prices once in December in the last 45 years, and it has not been the case since it was granted independence in 1997.

Outside of emergencies during the epidemic, it is the first time that officials have moved to a so-called “Super Thursday”, a so-called quarterback event where the BOE simultaneously publishes elections, minutes and predictions. – since its release in 2015.

Later Thursday, the European Central Bank is due to announce its plans to move away from emergency incentives. President Christine Lagarde has been in pain but has persuaded investors to increase the euro increase soon.

(Updates and markets, chart and line of December commodity prices.)
-It’s support from Libby Cherry, Lizzy Burden, Philip Aldrick and Andrew Atkinson.




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