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United Kingdom GBP

United Kingdom BoE Quantitative Easing

Info

History

Chart

Impact:

Low

Latest Release:

Date:

Actual:

£375B

Forecast:

Previous/Revision:

£375B

Period:

What Does It Measure?

The Bank of England's (BoE) Quantitative Easing (QE) measures the central bank's actions to inject money into the economy to promote economic growth and ensure price stability. Specifically, it assesses the purchasing of government bonds and financial assets, which influences money supply and interest rates, and plays a critical role in the UK's monetary policy framework.

Frequency

The BoE typically reviews and announces QE measures on a quarterly basis, with decisions often made during their Monetary Policy Committee (MPC) meetings which occur eight times a year.

Why Do Traders Care?

Traders pay close attention to QE announcements because they significantly affect market liquidity and borrowing costs, influencing asset prices in equities, bonds, and currencies. A larger-than-expected QE program can be bullish for equities and bearish for the British Pound, while a smaller program may lead to uncertain or negative reactions in the financial markets.

What Is It Derived From?

QE is derived from the decisions of the Monetary Policy Committee, which assesses economic conditions including inflation, employment figures, and overall economic growth. The quantitative easing framework follows systematic guidelines involving the purchasing of assets based on the economic outlook and financial stability considerations.

Description

The BoE's QE initiatives are typically discussed in the context of an overarching monetary policy aimed at stimulating the economy during periods of low growth or recession. The preliminary announcements made by the BoE are often expected to prompt immediate reactions in the markets, but the final assessment of their impact comes as economic conditions evolve over time and additional data is released.

Additional Notes

QE serves as a leading economic indicator impacting expectations about future economic growth and inflation. It is also related to other economic measures such as employment rates and GDP growth, providing a comprehensive view of the health of the UK economy and influencing monetary policy discussions worldwide.

Bullish or Bearish for Currency and Stocks

Higher than expected: Bearish for the British Pound, Bullish for Stocks. Dovish tone: Signaling lower interest rates or economic support, is usually bad for the British Pound but good for Stocks due to cheaper borrowing costs.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number	Better than forecast for the currency (or previous revise better)
Red Number	Worse than forecast for the currency (or previous revise better)
Hawkish	Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish	Favors lower rates to boost growth, weakening the currency but lifting stocks.

Date	Time	Actual	Forecast	Previous	Surprise
Aug 06, 2015		£375B		£375B