BoE: Extra easing remains well on the table – UOB
|Economist at UOB Group Lee Sue Ann reviewed the latest BoE event.
Key Quotes
“As expected, all nine members of the Monetary Policy Committee (MPC) voted to keep the main lending rate at 0.10%, with the central bank having cut rates twice from 0.75% since the beginning of the COVID-19 pandemic. The MPC also voted unanimously to maintain target for the total stock of its bond purchases at GBP745bn. However, much of the attention was on the reveal that the BOE and Prudential Regulation Authority will begin work in 4Q20 on the operational considerations around a move below zero.”
“The overnight commentary from the BOE reinforces our view that the BOE is ready to embark on further efforts to counter the economic slump. It is now a case of when, not if, the MPC eases again. Having said that, we think it is more likely to push the effective lower bound (ELB) by cutting the Bank Rate once more this year, but keep rates positive. A decision on that is possible at the next 5 November meeting, when we also expect the BOE to boost its bondbuying stimulus program by another GBP100bn.”
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