The UK is not there yet

Financial markets widely expected the Bank of England’s (BOE) decision to keep current monetary policy settings unchanged at its June monetary policy committee meeting.

“The MPC voted unanimously to maintain Bank Rate at 0.1% … and to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £20 billion. The Committee voted by a majority of 8-1 … to continue with its existing programme of UK government bond purchases … maintaining the target for the stock of these government bond purchases at £875 billion and so the total target stock of asset purchases at £895 billion.”

Yet, the FTSE-100 index closed half a percent higher on the day – up 10.1% this year to date and up 42.4% from the pandemic low plumbed in March last year – aided by the dip in the pound sterling’s exchange rate and the fall in the yield on 10-year UK bonds.

The British central…

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