A timeline of the BoE’s response to the pandemic
Head of Macro Analysis
Summary: A look at the BoE's response to the pandemic and the market reaction.
Beginning of February: First confirmed COVID cases in the United Kingdom.
March 11: The Bank of England decides to cut interest rate from 0.75% to 0.25% and to launch a term-funding scheme to support SMEs that can provide in excess of £100bn.
March 19: New interest rate cut to an historical low level of 0.10%. At the same time, the BoE steps in further by increasing U.K government bond purchases up to £200bn (with total QE program reaching £645bn).
April 9: The BoE implements temporary monetary financing of the government to fund the immediate cost of fighting the coronavirus without having to tap the gilts market (via the government’s bank account at the central bank, known as the “Ways and Means Facility”). The amount allocated to this new scheme is undisclosed.
June 18: As widely expected, the Bank of England beefs up the QE asset purchase program by £100bn – at the lower end of expectations - to a total of about £745bn. At constant path, the current program would have been exhausted in July. In addition, the main interest rate is maintained at 0.10%. The overarching message remains ultra-accommodative with indications of further measures to come to stimulate growth in H2 this year.
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)