Mounted police officers sit in outside the Royal Exchange and the Bank of England in London on June 17, 2020.

TOLGA AKMEN | AFP via Getty Images

The Bank of England was expecting “bumps in the way” as the economy reopened after the Covid-19 pandemic, Deputy Governor for Financial Stability Jon Cunliffe has told CNBC, after U.K. inflation came in hotter-than-expected once again in June.

The U.K.’s latest inflation prints on Wednesday morning came in ahead of expectations, with the consumer price index up 0.5% month-on-month for June versus a Reuters poll consensus of 0.2%.

Bank of England Governor Andrew Bailey said earlier this week that the rapid rollout of the U.K.’s vaccination program has boosted the country’s economic outlook, even as it battles surging cases of the highly-transmissible delta variant of Covid-19.

The Bank held its monetary policy steady at its last meeting — keeping its main lending rate at a historic low of 0.1% and its asset purchase program at its current £895 billion ($1.3 trillion) level — but vowed to monitor rising inflation.

On Tuesday, the Bank also scrapped its pandemic-era restrictions on banks paying dividends, saying its stress tests had confirmed that the likes of HSBC, Barclays and other major lenders had ample capital to survive the economic fallout from the pandemic.



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