In BoE's view, the stock valuations in the US are similar to the levels seen around the peak of the dotcom bubble on some parameters, with US bonds vulnerable to a weakening of the Fed's credibility.
Raise the cost of borrowing securities to curb leverage in repo markets
While the BoE downgraded its forecast for average economic growth this year to 1% from 1.25%, reflecting recent revisions to past growth, it raised its forecast for 2025 to 1.5% from 1%.
The UK and euro area central banks have little choice but to lower their key interest rates twice before the end of 2024
Several economists anticipate a near-term divergence between the Federal Reserve and most G10 central banks due to the Fed's anticipated delay in initiating rate cuts.
The President of Queens College was giving his prediction before the announcement of the policy rates expected at noon (London Time) on May 9
Sterling fell, shares jumped and government bond prices rose after the two policymakers, who previously voted for higher rates, changed position and joined in an 8-1 decision by rate-setters to keep borrowing costs at their 16-year high of 5.25%.
All options are on the table as the UK plugs ahead with research to figure out if a digital pound — which has been dubbed “Britcoin” — is worth building, according to Tom Mutton, who heads the Bank of England’s central bank digital currency (CBDC) project.
The Reserve Bank of India kept the key policy rates unchanged for the second time in a row but it clearly mentioned that the fight against inflation was far from over
Moreover, supportive data such as the Consumer Price Index (CPI), weekly jobless claims, and industrial production have helped sustain the current price range.
Despite the ongoing harmony of hikes, traders were holding on to the view that after one of the most rapid run of rate rises in history the heavyweights in the central banking ring were probably running out of punches.
The bank’s monetary policy committee voted 7-2 to push its key rate to 4%, approving the 10th consecutive rate increase since a post-pandemic surge in the world economy and Russia’s war in Ukraine drove inflation to 40-year highs.
BOE is in talks to rent dozens of hectares of land in north Vietnam to add to its relatively small plant in the south that supplies mostly television screens to South Korea's Samsung and LG Electronics Inc, the people said, declining to be identified as negotiations were confidential.
Up next is the European Central Bank, which will announce the result of its meeting at 13.15 GMT, capping a busy day for major central banks after Switzerland and Britain raised rates by 50 basis points (bps).
The transatlantic double act illustrates the trade-off confronting central banks as evidence of an impending global economic contraction becomes harder to ignore, even as inflation lingers.
The battered Japanese yen traded near a 32-year trough to the dollar at 149 yen, putting the major psychological barrier of 150 in focus.
The BoE has "signalled privately to bankers" of a possible extension if market turmoil "flares up" again over Britain's debt-fuelled budget, the FT said citing people briefed on discussions.
Trading was volatile, with investors cautious ahead of key U.S. inflation data and the start of third-quarter earnings later this week.
The BOE said it would buy as many long-dated government bonds as needed between now and Oct. 14 to stabilise financial markets, and added that it would postpone next week's start of its gilt sale programme.
In a tumultuous day, sterling dived to a record low in Asian trade, then recovered some ground on expectations the BoE would step in to calm a market on edge since the government announced its fiscal plans on Friday.
The BoE forecast in August that inflation would exceed 13%, and some economists have said it could top 20 per cent if gas prices - pushed up by Russia's invasion of Ukraine - stay high.
The company said that it was communicating with authorities and expected "no major impact on its overall operating performance".
Asked about comments from leadership front-runner Liz Truss's team suggesting that the central bank's rate-setting independence should be reviewed, Sunak said: "That would be a massive mistake for our country, and international investors would really not look very kindly on it at all."
Most investors and economists predict the BoE will increase its benchmark rate by half a percentage point to 1.75%, its highest level since late 2008 at the start of the global financial crisis, when it announces its decision at 1100 GMT.
The measures would accelerate a historic tightening of monetary policy to choke off the worst bout of inflation in 40 years. Governor Andrew Bailey and his colleagues have warned that prices may leap 11% this year, well above the 2% target.