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GBP/USD Tumbles on BOE Negative Rates Comments
The major central banks cut interest rates in panic during March, as coronavirus was spreading in the West. The Bank of England cut rates cut rates from 0.75% to 0.10% in two moves that month, with other major central banks also slashing rates at these lower levels. The But, the BOE has another issue to take care of, such as Brexit. They released the statement a while ago, after keeping rates unchanged this time, but made comments about negative rates, which sent the GBP tumbling lower, with GBP/USD trading at 1.29 from 1.30 earlier on.
Monetary Policy Decision – 17 Sep 2020
- BoE rates unchanged at +0.10% vs +0.10% expected
- MPC votes at 0-0-9 vs 0-0-9 expected
- Asset purchase program total £745 billion vs £745 billion expected
BOE Statement
- Bank of England says MPC had been briefed on the the BoE’s plans to explore how a negative bank rate could be implemented effectively. (seen some GBP selling on that headline)
- Total stock of asset purchases to £745 billion around the turn of the year
- Market contacts had expressed concern over recent Brexit developments
- Outlook for economy looks unusually uncertain
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