(Bloomberg) – The Bank of England is preparing to suspend its nearly 900 900 billion ($ 1.2 trillion) easing plan. The future of this controversial crisis-fighting tool is shrouded in mystery.
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More than a decade after purchasing the first government bond as part of the initial three – month, 75 75 billion plan implemented during the global financial crisis, the UK central bank will conclude what the final round of purchases will be next week. Rising inflation.
With this decision, the British will become the second largest central bank after Canada to interrupt the plan (known as QE for short) during the epidemic. British BC may be the first person to start reducing the huge assets accumulated during the corona virus outbreak as authorities are set to raise interest rates in the coming months.
If the withdrawal of this support raises the fiscal spending of governments, it will be a watershed for global monetary policy that could have potential consequences for public finances.
It may also be the symbol of England. In recent months, the tool has been criticized by former BC employees and current collaborators and MPs. According to them, the tool helped the rich by raising property prices and did not provide broader economic benefits.
As BC paves the way for negative interest rates, officials may be more proactive in eliminating QE as a key plan to stimulate the economy when needed.
“QE is past its expiration date and needs to be reduced more carefully and slowly,” said Gregory Burton, co-chairman of Arputnat Latham, a private bank and wealth manager in London.
The Bank of England’s next monetary policy decision will be released on December 16, the day after the purchase.
Suspicion is growing among company employees, including newcomers, and this reduces the chance of re-implementing this tool of monetary policy.
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