More from BOE Ramsden: BOE is ready to implement simple negative rates

Author: Greg Michalowski | Category: Central Banks

More from BOE Ramsden

  • issues around the nature of financial system and where UK is on recovery will matter for my decision on negative rates
  • BOE will focus on potential tearing over next 6 months while banks prepare for negative rates
  • Eurozone implemented negative rates 1 banks balance sheets were in a position to cope with hit to profits
  • we need to distinguish between the feasibility of negative rates, and their potential effectiveness in the UK. 
  • BOE is ready to implement simple negative rates
  • we do not expect to unwind Bill purchases any time in the near future, this is contingency planning
  • we will need to strong evidence of sustained progress to using up spare capacity, inflation returning to target, before tightening policy
  • financial market pricing of future interest rates has fallen very low, this means we need to think of relation between bank rate and asset purchase
  • government bonds and corporate bonds likely to main focus of BOE asset purchases
  • downside risks do remain for UK economy
  • vaccination news has been particularly encouraging
  • rise and housing prices largely due to structural factors such as lack of supply
  • we are seeing some pickup and short-term interest rate expectations consistent with greater optimism about economic outlook.
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