There has been mixed signals lately. Last month, Jonathan Haskel, fom the Monetary Policy Committee (MPC), said that reducing stimulus was not the right move for the foreseeable future. However, Michael Saunders, another member of the MPC, said in a seminar that the British central bank may decide to end its government bond-buying program sooner-than-expected due to the unexpected acceleration in inflation. “It may become appropriate fairly soon to withdraw some of the current monetary stimulus in order to return inflation to the 2 per cent target on a sustained basis”, adding that options could include “curtailing the current asset purchase programme — ending it in the next month or two and before the full £150bn has been purchased — and/or further monetary policy action next year.”
Earlier this week, the Reserve Bank of Australia unveiled plans to taper as early as next month. Meanwhile, two Fed policymakers Robert Kaplan and Richard Clarida spoke in favour of tapering QE this year.
Among stocks, Rolls-Royce soared 3.3% after announcing it was on track to meet its guidance for 2021.
Things to read:
Political inaction is dragging the UK deeper into the climate crisis (Financial Times)
Interest-Rate Increases Could Come as Soon as Early 2023, Fed’s Clarida Says (WSJ)