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.
