Bank of England Flags Slower BondBuying as Economy Recovers

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May 6 Reuters The Bank of England said on Thursday it would slow the pace of its bondbuying as it sharply increased its forecast for Britains economic growth this year after its coronavirus slump.

The BOE kept its bondbuying programme unchanged at 895 billion pounds 1.24 trillion, as expected by economists polled by Reuters but said it would slow bondbuying to 3.4 billion pounds a week between May and August, down from its current pace of 4.4 billion pounds a week..

The pound and British twoyear gilt yields fell after the announcement, then recouped those falls

Below are comments from analysts on the meeting outcome.

RICHARD MCGUIRE, HEAD OF RATES STRATEGY AT RABOBANK, LONDON

We had the initial headline that the overall purchase target was unchanged and that was greeted positively by markets given that there had been some speculation of a possible reduction in purchase volumes.

And then it appears that the market responded to the headlines that the BoE would slow the pace of bond purchases.

As the dust settles, there are also upbeat macro economic forecasts as well but overall it is a modest response.

Netnet, gilts are softer but modestly so. Sterling also did a double take on the headlines, reversing direction when it became clear that the pace of purchases would slow. So that was modestly positive for the pound.

MORGANE DELLEDONE, DIRECTOR OF RESEARCH, GLOBAL X

The upward revision of UK GDP growth this year to 7.25 is sending a positive sentiment with…

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