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Full statement of the BOE August monetary policy meeting decision

  
  Analysis
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The full statement by the BOE on its August policy decision

The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. In that context, its challenge at present is to respond to the economic and financial impact of the Covid-19 pandemic. At its meeting ending on 4 August 2020, the MPC voted unanimously to maintain Bank Rate at 0.1%. The Committee voted unanimously for the Bank of England to continue with its existing programmes of UK government bond and sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, maintaining the target for the total stock of these purchases at £745 billion.

The Committee’s projections for activity and inflation are set out in the accompanying August Monetary Policy Report. Although recent developments suggest a less weak starting point for the Committee’s latest projections, it is unclear how informative they are about how the economy will perform further out. The outlook for the UK and global economies remains unusually uncertain. It will depend critically on the evolution of the pandemic, measures taken to protect public health, and how governments, households and businesses respond to these factors. The MPC’s projections assume that the direct impact of Covid-19 on the economy dissipates gradually over the forecast period. Given the inherent uncertainties regarding the evolution of the pandemic, the MPC’s medium-term projections are a less informative guide than usual.

Global activity has strengthened over recent months, although it generally remains below its level in 2019 Q4. Covid-19 has continued to spread rapidly within a number of emerging market economies, however, and there has been a renewed rise in cases in many advanced economies. (more…)

UK government announces ban to Huawei from the country’s 5G networks

  
  Analysis
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Confirmation by UK culture minister, Oliver Dowden

Huawei
  • Telco companies to be barred from buying Huawei equipment from 2021
  • UK pledges to remove Huawei equipment by 2027
  • Huawei ban will delay, add costs to 5G rollout
  • The requirement will be set out in law

Dowden is alluding to the fact that US sanctions have made it hard to come to a decision to continue dealing with Huawei, but this just adds to the divide between the UK and China as well amid the recent Hong Kong row.

But in any case, this will also just heighten tensions between China and the US, UK further.

UK PM Johnson announces lock down effort in response to coronavirus threat

  
  Analysis
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A pre-recorded speech from UK Prime Minister Johnson being broadcast now

  • coronavirus is the biggest threat UK has faced for decades
  •  “Without huge national effort to halt the growth of this virus, there’ll come a moment when no health service in the world could possibly cope; because there won’t be enough ventilators, enough intensive care beds, enough doctors, enough nurses”
Says people should remain at home, only go out for essentials, medical reasons
  • critical thing is to stop the disease spreading between households
  • people will only be allowed to shop for basic necessities
  • people only allowed one form of exercise a day alone or with members of your household
  • people allowed out for any medical need, or to provide care or to help a vulnerable person
  • people can travel to and from work, but only where this is absolutely necessary and cannot be done from home
  • people should not be meeting friends or family who live outside their home
  • police will have the powers to enforce rules, including through fines and dispersing gatherings

Without a huge national effort, will come a moment when no health service in the world could possibly cope

  • says if too many people become seriously unwell at one time, the health service will be unable to handle it

More:

  • closing immediately all shops selling non-essential goods,​including clothing and electronic stores and other premises including libraries, playgrounds and outdoor gyms, and places of worship
  • will stop all gathering of more than two people, except people you live with
  • we’ll stop all social events​, including weddings, baptisms and other ceremonies, but excluding funerals
  •  restrictions will be kept under constant review
  • we will look again at restrictions in three weeks
  • we will relax restrictions if the evidence shows we are able to
  •  says the way ahead is hard, and it is still true that many lives will sadly be lost

(more…)

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