- June 24, 2021
- Posted by: Stratford Team
- Category: Business
We see a roughly even chance that the BoE could surprise markets today by signalling that it will end its planned asset purchases in August, instead of December as previously announced. While such a change would not have major economic consequences, it could take bond markets by surprise. Any commensurate jump in gilt yields could trigger a temporary correction in equity markets.
So far during 2021, the BoE has consistently surprised markets by being slightly more hawkish than expected. After furnishing marketing expectations during 2020 that it could reduce its main policy rate below zero, the BoE changed its tune by squashing such expectations at its February 2021 meeting. Then in May, the BoE surprised markets by starting an immediate tapering of its asset purchases.
The UK is recovering at breakneck speed with only a modest hit from the renewed spike in SARS-CoV-2 infections. In addition, inflation data have surprised to the upside…
The…
