Market news

6 May 2021

BoE eases foot off monetary policy accelerator - Wells Fargo Securities

ActionForex reports that analysts at Wells Fargo Securities discuss the Bank of England's (BoE) latest policy update.

"The Bank of England (BoE) kept its key policy parameters at today’s announcement, keeping the Bank Rate at 0.10% and maintaining its asset purchase target at £895 billion. However, in a modest tweak towards less accommodative monetary policy the BoE reduced the pace of its weekly asset purchases by £1 billion per week to £3.44 billion per week."

"The central bank now sees an earlier economic recovery, lifting its GDP growth forecast for 2021, but lowering its GDP growth forecast for 2022. So long as the economy continues to improve we believe a further moderate tapering of asset purchases is likely at the August announcement. At this time, however, we do not expect an initial policy interest rate increase until the first half of 2023."

"We view today’s announcement as a modest upside to our outlook for the pound. At the same time, we also view the announcement as broadly consistent with our medium-term profile which already anticipates modest gains in the pound versus the U.S. dollar over time, and a stronger pound versus the euro."

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