12 January 2021 - MPC member sets out case for negative rate

"Data for like-for-like retail sales was published overnight. It showed just how bad 2020 was for the sector. There was a slump in demand for fashion and homeware products while sales of foodstuffs grew by 5.4% over 2020. This perfectly illustrates the effect of the lockdowns that took place during the year. Overall, sales fell by 0.3%, the worst outcome since records began twenty-five years ago. Silvana Tenreyro, a member of the Bank of England’s Monetary Policy Committee spoke yesterday of the possibility that the Bank will need to add more stimulus to the economy This view was backed by U.S. investment bank Goldman Sachs which, in a report on the UK economy, said it expects a move as early as next month. Tenreyro went on to discuss negative interest rates in the UK. While most analysts expect stimulus to be delivered in the shape of increased or faster purchases of bonds, she said that it was important that the Bank maintained the weapon of another interest rate cut and retained the possibility of taking rates into negative territory. " Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

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