The gilt market reacted with some concern to the MPC’s decision this month not to announce an immediate increase in the funds it plans to allocate to quantitative easing. However, we think that policymakers are simply waiting until the release of the next Inflation Report in August. Not only is the Bank likely to use up the remaining £25bn that has already been sanctioned by the Treasury, but it is also likely to request approval for a further expansion of the scheme. Accordingly, the support that the Bank is providing to the gilt market (and indirectly to other risky assets) should continue for some while yet.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services