BOE Interest Rate Decision: Keep Calm And Carry On?

And it wouldn’t be the first time that the bank tapered, even in the current cycle. In June of last year, they paired back their purchases by a modest amount and were still able to substantially support the economy and the markets.

The timing is the key

It’s just a matter of when the BEO will cut back on its purchases.

So, the doubt now is whether it will be at this meeting or the next. So far, members of the MPC have been quite upbeat about the economy, suggesting they will be willing to vote for a taper.

On the other hand, there hasn’t been any official mention of it yet, and it might be that the BOE doesn’t want it to surprise the markets.

A compromise might be the most likely option: that following tomorrow’s meeting, they will announce that they considered tapering, and it will likely happen at the next get-together. That ought to provide enough consternation for traders; leaving the pound to potentially float a little lower.

As a reminder, if the BOE tapers, it’s expected to support the pound and weigh on the FTSE. If they decline to mention it at all, we could see the pound take a bit of a dive and see better performance among the stocks

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