{"id":57715,"date":"2021-05-07T06:24:08","date_gmt":"2021-05-07T11:24:08","guid":{"rendered":"https:\/\/olduvai.ca\/?p=57715"},"modified":"2021-05-07T06:24:08","modified_gmt":"2021-05-07T11:24:08","slug":"bank-of-england-now-2nd-central-bank-to-taper-after-canada-but-denies-tapering-is-tapering-also-following-canada","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=57715","title":{"rendered":"Bank of England Now 2nd Central Bank to Taper, After Canada, but Denies Tapering is \u201cTapering,\u201d also Following Canada"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2021\/05\/06\/bank-of-england-now-2nd-central-bank-to-taper-after-canada-but-denies-tapering-is-tapering-also-following-canada\/\">Bank of England Now 2nd Central Bank to Taper, After Canada, but Denies Tapering is \u201cTapering,\u201d also Following Canada<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>The Big Taper starts one central bank at a time. But you gotta keep the markets from swooning with a bit of welcome delusion.<\/strong><\/p>\n<p>The Bank of England\u2019s Monetary Policy Committee (MPC) today announced that it\u00a0<a href=\"https:\/\/www.bankofengland.co.uk\/monetary-policy-summary-and-minutes\/2021\/may-2021\" target=\"_blank\" rel=\"noopener\">voted<\/a>\u00a0unanimously to maintain its policy rate at 0.1%. But in terms of its asset purchases, it took the trail the Bank of Canada blazed last November and then widened in April: tapering.<\/p>\n<p>The BoE\u00a0<a href=\"https:\/\/www.bankofengland.co.uk\/markets\/market-notices\/2021\/may\/asset-purchase-facility-gilt-purchases-may-2021\" target=\"_blank\" rel=\"noopener\">announced<\/a>\u00a0that the blistering pace of its asset purchases would be \u201cslowed somewhat\u201d \u00a0\u2013 tapering the bond purchases from \u00a34.4 billion a week to \u00a33.4 billion a week \u2013 but that this tapering was an \u201coperational decision\u201d that \u201cshould not be interpreted as a change in the stance of monetary policy.\u201d<\/p>\n<p>This \u201cis not a tapering decision,\u201d emphasized BoE governor Andrew Bailey during the press conference. The reason this tapering is not \u201ca tapering decision,\u201d he said, is because the BoE left its target for the final level of QE assets unchanged.<\/p>\n<p>Unlike the Fed, the BoE doesn\u2019t have an open-ended QE, but had set a target of bringing its holdings of UK government bonds to \u00a3875 billion and its holdings of corporate bonds to \u00a320 billion, for a combined target of \u00a3895 billion. And at the meeting, the BoE didn\u2019t change these \u201cfixed amounts,\u201d as Bailey put it.<\/p>\n<p>Obviously, denying that tapering is tapering was designed to mollify the markets with a welcome dose of delusion, and it worked: the UK\u2019s stock index FTSE 100 rose 0.5% for the day.<\/p>\n<p>However, when the members voted on maintaining the target of \u00a3895 billion, it wasn\u2019t unanimous, with eight members voting for maintaining it, and one member, outgoing chief economist Andy Haldane, voting to lower it by \u00a350 billion, to \u00a3845 billion.<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<p>&nbsp;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Bank of England Now 2nd Central Bank to Taper, After Canada, but Denies Tapering is \u201cTapering,\u201d also Following Canada The Big Taper starts one central bank at a time. But you gotta keep the markets from swooning with a bit of welcome delusion. The Bank of England\u2019s Monetary Policy Committee (MPC) today announced that it\u00a0voted\u00a0unanimously [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[942,56,7340,3756,103,124,3324,8728,4254,4255],"class_list":["post-57715","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-canada","tag-bank-of-england","tag-boc","tag-boe","tag-canada","tag-central-banks","tag-england","tag-tapering","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57715","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=57715"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57715\/revisions"}],"predecessor-version":[{"id":57716,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57715\/revisions\/57716"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=57715"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=57715"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=57715"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}