LONDON (Reuters) -The Bank of England held interest rates at 5.0% on Thursday and voted to run down its stock of British government bonds by another 100...
LONDON -The Bank of England held interest rates at 5.0% on Thursday and voted to run down its stock of British government bonds by another 100 billion pounds over the coming 12 months, a move that could weigh on the government's finances.
On Wednesday, the U.S. Federal Reserve cut rates by 0.5 percentage points - a larger-than-expected move that reflected the Fed's confidence that inflation pressures were cooling. The BoE said inflation was likely to rise to around 2.5% by the year's end from 2.2% in the most recent data, compared with a previous forecast of around 2.75%. Lower oil prices contributed to the downgrade.
The 100 billion-pound pace of QT over the coming 12 months will be the same as over the past year, in line with most market expectations. Many economists think finance minister Rachel Reevescould change Britain's fiscal rules to exclude the impact of the BoE's QT programme in her inaugural budget on Oct. 30 - something that could give her several billion pounds of extra fiscal space.
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