On Thursday, the Bank of England has lowered an interest rate from 0,5% to 0,25%. I have expanded the program of stimulation of APF to 435 billion (with 375), and also I have added the program for purchase of corporate bonds for 10 billion pounds. But there is more to come: the inflation quarterly statement is submitted, Mark Carney has held a press conference. We argue on events consequences.
GBPUSD has fallen to 200 points within half an hour.
Decrease in a rate of Bank of England has happened for the first time since 2009, and its current size of 0,25% is a minimum level of an interest rate since the moment of foundation of Bank.
Operations of the Regulator have turned out to be consequence of results of the held referendum on an exit of Britain from the EU.
Except the publication of the decision the quarterly inflation statement has also been submitted, the press conference of the managing director, Mark Carney is held.
By results of done
What to wait now for?
The bank of England has made the case, now looks on pound will be directed towards political and fiscal decisions from the government of Great Britain, and it is good that we have a new prime minister, on behalf of Theresa May.
The main speculation for pound:
The pound will continue to react sharply to all negative signals from economy, in particular production and data of trading balance. The separate attention will be paid to PMI indicators which have been noted by Carney, and have entered the negative field (all indicators are lower comfortable 50).
Actions of Bank of England will also influence the decision of FRS in December, probability of increase of a rate by which it is gradually reduced (at the moment 30% for a meeting in December).
The bank of England did not manage to be the pioneer if you desire, so to be expressed. The first after Brexit, the Reserve Bank of Australia has lowered the interest rate, but actions of Bank of England do expected actions from other Central Banks by more transparent as the fact of renewal of active stimulation of the British economy simply "opens for them eyes" and shows a complete deal of cards on a table.
The following the Reserve Bank of New Zealand which will make the decision this Thursday can go for interest rate reduction.
GBPUSD has fallen to 200 points within half an hour.
Decrease in a rate of Bank of England has happened for the first time since 2009, and its current size of 0,25% is a minimum level of an interest rate since the moment of foundation of Bank.
Operations of the Regulator have turned out to be consequence of results of the held referendum on an exit of Britain from the EU.
Except the publication of the decision the quarterly inflation statement has also been submitted, the press conference of the managing director, Mark Carney is held.
By results of done
- interest rate reduction has voted pro: 9 of 9
- redemption of corporate bonds: 8 of 9
- increase of the APF program has voted: 6 of 9
- The program of the redemption of corporate bonds is expected the minimum period in 18 months.
- Recession of the British economy in the second half of 2016 was not considered and is not considered
- The forecast of GDP for 2016 without changes (2,0%); for 2017 it is lowered from 2,3% to 0,8%; 2018 from 2,3% to 1,8%.
- Reduction of investment processes is expected
- In case of need, members of MPC are ready to return to a question of additional reducing an interest rate to zero value
- Carney: The bank of England is ready to take additional measures in case of need
- Carney: The government of England it is necessary to develop the plan of increase of productivity
- Carney: Considers PMI indicators as reliable indexes
- Carney: Denies scenarios with a negative interest rate
- Carney: Incentives first of all are directed for the British economy, but not for decline in the rate
- Carney: Depreciation of pound will help to disperse inflation to the target objective
What to wait now for?
The bank of England has made the case, now looks on pound will be directed towards political and fiscal decisions from the government of Great Britain, and it is good that we have a new prime minister, on behalf of Theresa May.
The main speculation for pound:
- question of a possibility of establishment of zero rates by Bank of England
- Political actions and actions of the Ministry of Finance.
The pound will continue to react sharply to all negative signals from economy, in particular production and data of trading balance. The separate attention will be paid to PMI indicators which have been noted by Carney, and have entered the negative field (all indicators are lower comfortable 50).
Actions of Bank of England will also influence the decision of FRS in December, probability of increase of a rate by which it is gradually reduced (at the moment 30% for a meeting in December).
The bank of England did not manage to be the pioneer if you desire, so to be expressed. The first after Brexit, the Reserve Bank of Australia has lowered the interest rate, but actions of Bank of England do expected actions from other Central Banks by more transparent as the fact of renewal of active stimulation of the British economy simply "opens for them eyes" and shows a complete deal of cards on a table.
The following the Reserve Bank of New Zealand which will make the decision this Thursday can go for interest rate reduction.
