Impact: 
Medium
Latest Release:
Date:
Forecast:
Previous/Revision:
Period:
What Does It Measure?
The Bank of England's Financial Policy Committee (FPC) Statement measures the health of the financial system and assesses risks to its stability specifically focusing on macroprudential policy issues that may affect the UK economy. Key areas of assessment include credit growth, asset prices, and systemic risks, with a focus on the overall resilience of the UK financial system.
Frequency
The FPC Statement is typically released quarterly, with the publication occurring shortly after the FPC meetings, usually in March, June, September, and December.
Why Do Traders Care?
Traders pay close attention to the FPC Statement because it can influence monetary policy decisions that directly impact asset prices, including the British pound, equities, and bonds. The implications of the statement can lead to immediate market reactions, as insights on financial stability and potential regulatory changes can affect economic forecasts and traders' investment decisions.
What Is It Derived From?
The FPC Statement is derived from a series of analyses conducted by the Financial Policy Committee, which includes data on financial stability, macroeconomic indicators, and feedback from other financial institutions. It incorporates information from stress tests, macroeconomic modeling, and consultations with stakeholders to gauge systemic risks within the UK financial sector.
Description
The FPC Statement serves as an integral tool for providing guidance on the macroprudential regulatory landscape, addressing potential vulnerabilities in the financial system. It covers themes such as credit risk, leverage ratios, and sectoral pressures while highlighting the committee's intended policy directions and strategic responses to identified risks.
Additional Notes
The FPC Statement is regarded as a coincident indicator of financial stability, often compared with other economic reports like the Monetary Policy Committee (MPC) minutes to evaluate overall economic conditions. It is pivotal in understanding the relationship between monetary policy and financial regulation, particularly how these elements interface to maintain economic stability in the UK.
Bullish or Bearish for Currency and Stocks
Given that the FPC Statement typically does not provide numerical forecasts, the impact on currency and stocks is primarily interpreted through the tone and implications regarding financial stability and regulatory outlooks. If the statement is perceived as suggesting a proactive approach to mitigate risks, it would generally be considered bullish for the currency and stocks, signaling confidence in economic management. Conversely, a perception of heightened risks or regulatory tightening might be bearish, reflecting concerns about potential limitations on credit availability.
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. |
Copy Link
Share on Facebook
Share on X
Share by Email
