Market News The Bank of England’s interest rate hike is expected to advance in time, and the pound sterling rises by 27 points in the short-term, with a volatility of 40 points
The Bank of England’s interest rate hike is expected to advance in time, and the pound sterling rises by 27 points in the short-term, with a volatility of 40 points
GMT+8 At 19:00 on Thursday, the Bank of England announced a new interest rate decision, maintaining the current policy unchanged, but the Bank of England expects CPI to rise further, and the money market advances the Bank of England’s 15 basis point rate hike bet to 2022. Month (previously May 2022). As of press time, the pound has risen 23 points to 1.3708 against the U.S. dollar, with a volatility of 40 points.
2021-09-23
8711
GMT+8 At 19:00 on Thursday (September 23), the Bank of England announced a new interest rate resolution and maintained its current policy. However, the Bank of England expects that the CPI will rise further, and the money market will bet the Bank of England to raise interest rates by 15 basis points. Note advance to March 2022 (previously May 2022). As of press time, the pound has risen 23 points to 1.3708 against the U.S. dollar, with a volatility of 40 points.
The Bank of England's interest rate decision: The Monetary Policy Committee maintains the current benchmark interest rate at 0.10% with a vote ratio of 0-9-0 (rate increase-stability maintenance-interest rate reduction), and a 7-2 vote to maintain the size of central bank asset purchases of 875 billion pounds unchanged (Sanders and Ramsden voted to lower the purchase target of British government bonds). The committee unanimously voted to keep the central bank's corporate bond purchases of 20 billion pounds unchanged. The committee judged that the current monetary policy stance is still appropriate.
Bank of England interest rate decision: All members agree that any initial monetary policy tightening in the future should be implemented by raising bank interest rates, even if such tightening is appropriate before the end of the purchase of British government bonds. The committee still has various opinions on whether the conditions for the guidance on interest rate hikes are met, but all members agreed that the previous formal guidance is no longer useful under the current circumstances.
The Bank of England's interest rate decision: The consumer price index is expected to rise further in the short term, and will be slightly higher than 4% in the fourth quarter of 2021. Due to the development of energy and commodity prices, the CPI is expected to rise further.
The Bank of England's interest rate decision: Since the August Monetary Policy Committee meeting, the pace of global economic recovery has shown signs of slowing down. Global inflationary pressures remain strong, and there are signs that cost pressures may be more persistent. In view of the lag between monetary policy changes and their impact on inflation, the Monetary Policy Committee will continue to focus on the medium-term outlook for inflation.
The Bank of England's interest rate decision: Although other spending indicators remain at a strong level overall, official estimates of retail sales have declined. The committee’s core expectation remains that the current global cost pressures will prove to be temporary. The reopening of the economy has led to further increases in the prices of some consumer services, but to a lesser extent. As the supply bottleneck is cleared, demand growth slows, and corporate pricing power weakens, inflation may fall in the mid-term, consistent with the forecast in the August report.
Bank of England interest rate decision: The committee believes that uncertainty about the outlook for the labor market has increased. After the unpaid leave program ends, there are many views on the most likely path of unemployment in the short term. Key issues include how the economy will adapt to the unpaid leave plan that ends at the end of September.
The Bank of England is nearing the end of its 895 billion pounds (1.22 trillion U.S. dollars) asset purchase program, and remains vigilant about the increase in inflationary pressures caused by bottlenecks. The Bank of England is ahead of other major central banks and plans to stop quantitative easing before the end of this year.
The surge in cases in July led to a slowdown in economic growth that almost stalled, and corporate surveys showed that the growth momentum is difficult to recover. Most economists believe that the Bank of England will wait longer before taking action and will raise interest rates only once next year.
A particularly noteworthy issue is that as the UK’s August inflation rate hit a nine-year high (more than a percentage point higher than the 2% target set by the Bank of England), the job retention program for more than one million workers will end this month. Temporary increases in other welfare subsidies will also expire, putting more pressure on families as inflation pushes up the cost of necessities. If an increase in the inflation rate pushes up the public’s long-term inflation expectations, it will cause companies and workers to consider their future pricing decisions and wage requirements with an inflation rate higher than the target.
In recent weeks, natural gas prices have soared across Europe, which has had a knock-on effect on household energy bills, industrial chemicals and even food supplies. The key to the timing of policy tightening is whether the Bank of England begins to suspect that these price increases are temporary.
Paul Scully, the minister in charge of small business and consumer affairs in the British government, said that British consumers should not panic shopping because the country will not return to the "winter of dissatisfaction" in the 1970s, when the strikes and power outages that year Put the British economy in trouble.
When the media asked if there would be "empty shelves, power outages, and rising costs of living like the winter of dissatisfaction," Scully said: "No, it doesn't look like it was in the 1970s. I don't admit it. One point. We need to re-enhance economic resilience in some places. People don’t need to go out and make panic buying.”
But Citigroup said on Tuesday (September 21) that the British public’s expectations for inflation in the coming year and beyond have jumped this month. Expectations rose a full percentage point to 4.1%, and inflation expectations for the next five to 10 years rose to 3.8%.
Goldman Sachs analysts said that they have advanced the basic forecast of interest rate hikes to May 2022, because the Bank of England Monetary Policy Committee believes that the minimum conditions to start tightening monetary policy have been met.
Deutsche Bank analysts said in a research report: "In terms of interest rate strategy, we found that the forecast for 2022 is heavily inclined to hawkish results, while forecasts after 2022 are inclined to dovish results."
The latest data also shows that as companies restart operations and government subsidies will be reduced from next month, and domestic energy prices have soared, the UK labor market has tightened more than expected. The UK's September IHS Markit/CIPS Comprehensive Purchasing Managers Index fell to 54.1, the lowest level since February, which is also the fourth consecutive month.
Chris Williamson, chief business economist at IHS Markit, said: “September PMI data will intensify concerns that the UK economy is heading towards'stagflation'. Although there are clear signs that demand is cooling since peaking in the second quarter, the survey also pointed out that , Business activities are increasingly restricted by shortages of materials and labor."
The previously announced UK retail sales unexpectedly fell in August and recorded a fourth consecutive month of decline. This is the longest continuous decline since the start of the current record. The supply chain bottleneck caused by the global supply shortage and the shortage of British truck drivers after the epidemic has made it difficult for many retailers to maintain sufficient goods on their shelves.
According to data from the Federation of British Industry (CBI) on Monday (September 20), it is difficult for British employers to recruit suitable employees due to the new crown virus pandemic and Brexit. Employers currently planning to raise wages are more than any time since the global financial crisis. A lot.
At the end of August, slightly more than three-quarters of the 422 companies surveyed by CBI and recruitment firm Pertemps Network said labor shortages are hurting competitiveness, the highest percentage in more than five years.
Two new policymakers joined the Bank of England Monetary Policy Committee this month-former European Central Bank and Goldman Sachs economist Huw Pill replaced Andy Haldane as chief economist of the Bank of England; formerly served as economic cooperation Catherine Mann, chief economist of the OECD, succeeds Gertjan Vlieghe.
Mann previously told The Times that the contemporary inflation situation is not as sticky as it was in the 1970s, because the company's pricing power is no longer as strong as before, and wage growth has been decoupled from consumer inflation.
Peel has published several papers and op-eds in the past showing that he belongs to the monetary policy hawks camp. He believes that due to the long-term downward trend of interest rates since the financial crisis, the central bank has less room for maneuver to use traditional monetary policy levers to support the global economy during the crisis. It’s becoming more and more obvious. If there is a downturn in the economy, the room for further monetary easing seems limited."
The Bank of England's interest rate decision: The Monetary Policy Committee maintains the current benchmark interest rate at 0.10% with a vote ratio of 0-9-0 (rate increase-stability maintenance-interest rate reduction), and a 7-2 vote to maintain the size of central bank asset purchases of 875 billion pounds unchanged (Sanders and Ramsden voted to lower the purchase target of British government bonds). The committee unanimously voted to keep the central bank's corporate bond purchases of 20 billion pounds unchanged. The committee judged that the current monetary policy stance is still appropriate.
Bank of England interest rate decision: All members agree that any initial monetary policy tightening in the future should be implemented by raising bank interest rates, even if such tightening is appropriate before the end of the purchase of British government bonds. The committee still has various opinions on whether the conditions for the guidance on interest rate hikes are met, but all members agreed that the previous formal guidance is no longer useful under the current circumstances.
The Bank of England's interest rate decision: The consumer price index is expected to rise further in the short term, and will be slightly higher than 4% in the fourth quarter of 2021. Due to the development of energy and commodity prices, the CPI is expected to rise further.
The Bank of England's interest rate decision: Since the August Monetary Policy Committee meeting, the pace of global economic recovery has shown signs of slowing down. Global inflationary pressures remain strong, and there are signs that cost pressures may be more persistent. In view of the lag between monetary policy changes and their impact on inflation, the Monetary Policy Committee will continue to focus on the medium-term outlook for inflation.
The Bank of England's interest rate decision: Although other spending indicators remain at a strong level overall, official estimates of retail sales have declined. The committee’s core expectation remains that the current global cost pressures will prove to be temporary. The reopening of the economy has led to further increases in the prices of some consumer services, but to a lesser extent. As the supply bottleneck is cleared, demand growth slows, and corporate pricing power weakens, inflation may fall in the mid-term, consistent with the forecast in the August report.
Bank of England interest rate decision: The committee believes that uncertainty about the outlook for the labor market has increased. After the unpaid leave program ends, there are many views on the most likely path of unemployment in the short term. Key issues include how the economy will adapt to the unpaid leave plan that ends at the end of September.
The Bank of England is nearing the end of its 895 billion pounds (1.22 trillion U.S. dollars) asset purchase program, and remains vigilant about the increase in inflationary pressures caused by bottlenecks. The Bank of England is ahead of other major central banks and plans to stop quantitative easing before the end of this year.
The surge in cases in July led to a slowdown in economic growth that almost stalled, and corporate surveys showed that the growth momentum is difficult to recover. Most economists believe that the Bank of England will wait longer before taking action and will raise interest rates only once next year.
Soaring inflation
A particularly noteworthy issue is that as the UK’s August inflation rate hit a nine-year high (more than a percentage point higher than the 2% target set by the Bank of England), the job retention program for more than one million workers will end this month. Temporary increases in other welfare subsidies will also expire, putting more pressure on families as inflation pushes up the cost of necessities. If an increase in the inflation rate pushes up the public’s long-term inflation expectations, it will cause companies and workers to consider their future pricing decisions and wage requirements with an inflation rate higher than the target.
In recent weeks, natural gas prices have soared across Europe, which has had a knock-on effect on household energy bills, industrial chemicals and even food supplies. The key to the timing of policy tightening is whether the Bank of England begins to suspect that these price increases are temporary.
Paul Scully, the minister in charge of small business and consumer affairs in the British government, said that British consumers should not panic shopping because the country will not return to the "winter of dissatisfaction" in the 1970s, when the strikes and power outages that year Put the British economy in trouble.
When the media asked if there would be "empty shelves, power outages, and rising costs of living like the winter of dissatisfaction," Scully said: "No, it doesn't look like it was in the 1970s. I don't admit it. One point. We need to re-enhance economic resilience in some places. People don’t need to go out and make panic buying.”
But Citigroup said on Tuesday (September 21) that the British public’s expectations for inflation in the coming year and beyond have jumped this month. Expectations rose a full percentage point to 4.1%, and inflation expectations for the next five to 10 years rose to 3.8%.
Goldman Sachs analysts said that they have advanced the basic forecast of interest rate hikes to May 2022, because the Bank of England Monetary Policy Committee believes that the minimum conditions to start tightening monetary policy have been met.
Deutsche Bank analysts said in a research report: "In terms of interest rate strategy, we found that the forecast for 2022 is heavily inclined to hawkish results, while forecasts after 2022 are inclined to dovish results."
Difficult to recruit people
The latest data also shows that as companies restart operations and government subsidies will be reduced from next month, and domestic energy prices have soared, the UK labor market has tightened more than expected. The UK's September IHS Markit/CIPS Comprehensive Purchasing Managers Index fell to 54.1, the lowest level since February, which is also the fourth consecutive month.
Chris Williamson, chief business economist at IHS Markit, said: “September PMI data will intensify concerns that the UK economy is heading towards'stagflation'. Although there are clear signs that demand is cooling since peaking in the second quarter, the survey also pointed out that , Business activities are increasingly restricted by shortages of materials and labor."
The previously announced UK retail sales unexpectedly fell in August and recorded a fourth consecutive month of decline. This is the longest continuous decline since the start of the current record. The supply chain bottleneck caused by the global supply shortage and the shortage of British truck drivers after the epidemic has made it difficult for many retailers to maintain sufficient goods on their shelves.
According to data from the Federation of British Industry (CBI) on Monday (September 20), it is difficult for British employers to recruit suitable employees due to the new crown virus pandemic and Brexit. Employers currently planning to raise wages are more than any time since the global financial crisis. A lot.
At the end of August, slightly more than three-quarters of the 422 companies surveyed by CBI and recruitment firm Pertemps Network said labor shortages are hurting competitiveness, the highest percentage in more than five years.
Personnel changes at the decision-making level of the Bank of England
Two new policymakers joined the Bank of England Monetary Policy Committee this month-former European Central Bank and Goldman Sachs economist Huw Pill replaced Andy Haldane as chief economist of the Bank of England; formerly served as economic cooperation Catherine Mann, chief economist of the OECD, succeeds Gertjan Vlieghe.
Mann previously told The Times that the contemporary inflation situation is not as sticky as it was in the 1970s, because the company's pricing power is no longer as strong as before, and wage growth has been decoupled from consumer inflation.
Peel has published several papers and op-eds in the past showing that he belongs to the monetary policy hawks camp. He believes that due to the long-term downward trend of interest rates since the financial crisis, the central bank has less room for maneuver to use traditional monetary policy levers to support the global economy during the crisis. It’s becoming more and more obvious. If there is a downturn in the economy, the room for further monetary easing seems limited."
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