Market Highlights – Bank of England keeps interest rates unchanged at September policy meeting
Business and Finance News:
On the evening of September 17th (Beijing time), the Bank of England announced its latest rate decision. The monetary policy committee of the UK central bank has formulated a monetary policy to achieve an inflation target of 2% and will be carrying out the policy in a way that will help to maintain economic growth and employment rate. The central bank also noted that the challenge that it is facing is to deal with the economic and financial impact of the pandemic.
At the policy meeting, which concluded on September 16th, that the monetary policy committee unanimously voted to keep the bank interest rate unchanged at 0.1% and to continue its existing UK government bond purchase program and the pound sterling non-financial investment grade corporate bond purchase program with a total target of GBP 745 billion.
The current economic indicators are broadly in line with the monetary policy committee’s expectations that they made at the August meeting. GBP/USD fell about 2%, which is reflecting the latest progress in the Brexit talks.
UK GDP in July was 18.5% higher than its low in April. But it is still 11.5% lower than the figure recorded in the fourth quarter of 2019. Data showed that the number of salaried employees fell by about 700,000 between February and August. The number of furloughed works continue to decline. After the government’s employment support program has ended, there is still considerable uncertainty in the labor market.
The annualized CPI fell from 1.0% in July to 0.2% in August, in line with the temporary impact of the government’s “Eat Out to Help Out” program and the VAT cuts on hotels, vacation accommodation and tourist attractions. The CPI is expected to remain at the below-1% level until early 2021, although it is slightly higher than expected when the report was released in August.
Key economic and events to watch (Time zone: UTC+8):
20:30 Canada Wholesale Sales for July (MoM) – Previous: 18.5%; Forecast: 3.5%
20:30 Canada Retail Sales for July (MoM) – Previous: 23.7%; Forecast: 1%
20:30 U.S. Current Account in Q2 – Previous: – USD 104.2 billion; Forecast: – USD 157.9 billion
22:00 U.S. University of Michigan Consumer Sentiment Index for September (Preliminary data)- Previous: 74.1; Forecast: 75
22:00 U.S. Conference Board Leading Economic Index – Previous:1.4%; Forecast: 1.3%
The information and analysis included in this report only represent the research analyst’s views. Forex trading involves risk and you are advised to exercise caution in relation to the report. If you are in any doubt about any of the contents, you should obtain independent professional advice.
