Good morning, we welcome our information on the global economy, financial markets, the eurozone and trade.
The Bank of England Now it has a lot on its plate. The economy is emerging from one of its worst recessions, Brexit without a deal could slip, and inflation has plummeted to near zero.
At noon today, the BoE will unveil its latest monetary policy decision and refresh us in assessing the economic outlook. This would be a brilliant read as unemployment is expected to almost double this year.
The bank may drop some loud hints that it will soon launch more stimulus measures, especially if Brexit fears hold the economy tight.
Jim Reid Deutsche Bank predicts that it will suspend interest rates and its QE plan today, but may act before Christmas:
Our basic case is that there will be a further $ 60 billion for the QE project in December, although risks are mounting that this may be announced shortly before the November meeting. The meeting comes against the backdrop of increasing Brexit uncertainty, which could help raise uncertainty and weaken confidence.
Brexit was not mentioned once in the minutes of the August meeting, but it will be interesting to see if this change exists ….
The US Federal Reserve has already said. Last night, the Federal Reserve said it would keep interest rates at a minimum until 2023, confirming that inflation is on track to exceed its target..
As Fed Add Jerome Powell put it:
What we are effectively saying is that rates will be more accommodating as long as the economy is far behind in its recovery,
The central bank has raised its growth and unemployment forecasts, indicating that the economy is recovering. It now expects U.S. GDP to fall 3.7% this year, down from 6.5% previously. Unemployment now stands at 7.6% by the end of the year, down from 9.3%.
You can expect this pledge of a more relaxed monetary policy to encourage investors and raise risky assets, but US stocks fell last night and the Nasdaq lost 1.25%.
Investors feared that Powell had warned that the US regeneration could be in jeopardy without high government spending – a blunder for Congress to end their differences over stimulus packages.
Fiona Cincotta of City schedule Explains:
The shares were sold following the announcement by the central bank, and the US dollar rose, and the market portrayed its frustration at the central bank’s reluctance to offer any stimulus.
This has hit stocks in Asia, and European stocks are also facing losses in the open. The FTSE 100 is forecast to fall around 1% – back to 6,000 points.
We monitor all activity throughout the day, including the latest U.S. unemployment and household data.
- Afternoon BSD: Bank of England interest rate decision
- 1.30pm BSD: US Weekly Unemployment Statistics
- 1.30pm BST: US mortgage approvals and housing starts