Bank of England Hikes Interest Rates

Source: Dukascopy Bank SA
On December 16, the Bank of England unexpectedly hiked interest rates and caused a surge of the GBP against peer currencies. Meanwhile, corporate and government bond purchases would remain unchanged.

Quoting the Assessment: "At its meeting ending on 15 December 2021, the MPC voted by a majority of 8-1 to increase Bank Rate by 0.15 percentage points, to 0.25%.

The Committee voted unanimously for the Bank of England to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £20 billion. The Committee also voted unanimously to maintain the stock of UK government bond purchases, financed by the issuance of central bank reserves, at £875 billion, and so the total target stock of asset purchases at £895 billion."

Released Document

Monetary Policy Summary, December 2021

On the release, the GBP/USD started a sharp move upwards, which in just ten minutes reached 88 base points or 0.66%.

On a larger scale, the GBP erased all December losses against the US Dollar and reached November 11 levels.

Initial Reaction

Larger scale situation

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Actual Topics

Thu, 16 Dec 2021 13:50:37 GMT

European Central Bank reduces stimulus

On December 16, the European Central Bank published its monetary policy decisions. The central bank kept its interest rates unchanged. However, the bank would reduce asset purchases of the pandemic emergency purchase programme. Quoting the official release: "The Governing Council decided to extend the reinvestment horizon for the PEPP. It now intends to reinvest the principal payments from maturing

Thu, 16 Dec 2021 08:53:06 GMT

SNB keeps policy intact

On December 16, the Swiss National Bank published its Monetary Policy Assessment. In general, the bank kept its policy unchanged. The deposit rate would remain -0.75% and the bank would intervene into forex markets to push the value of the Swiss Franc down. Quoting the Assessment: "The SNB is maintaining its expansionary monetary policy. It is thus ensuring price

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