Weekly Update - 18th June 2021
Central Bank Policies
UNITED STATES.On Wednesday, the Fed left interest rates unchanged. However, contrary to previous expectations, Fed’s median ‘dot plots’ now show that two interest rate hikes are expected by the end of 2023. ‘Dot plots’ are a graphic representation of the expectations of FOMC (Federal Open Market Committee) members regarding interest rates.
UNITED KINGDOM. The BoE slowed its bond-buying last month from 4.4 billion pounds to 3.4 billion pounds a week. It kept the total size of the bond-buying programme unchanged at 895 billion pounds, with Governor Andrew Bailey stressing the move did not amount to tapering. Meanwhile, inflation in the UK for the month of May jumped above the BoE target of 2% for the first time in two years, which will be the main subject of the BoE meeting next week.
EUROZONE. As the economy rebounds, some policymakers are making the case to start discussions about rolling back the €1.85 trillion Pandemic Emergency Purchase Programme (PEPP), scheduled to run until at least end-March 2022. Chief Economist Philip Lane said it was "premature and unnecessary" to discuss questions related to ending PEPP, especially since unemployment remains high and wage pressures muted.
JAPAN. The BOJ decided to extend the deadline for its scheme to support corporate funding by six months until next March and maintained its monetary policy stance as the coronavirus pandemic drags on.
NORWAY. Norges Bank said that it could hike its key policy interest rates twice in the second half of this year and also twice during the first half of 2022. It kept rates on hold at a record low 0% and said a first hike is likely in September.
CANADA. Having announced a tapering in April, Canada has indicated its key interest rates could rise from a recordlow 0.25% in the second half of 2022.
International Emission Trading Association survey
According to the last International Emission Trading Association (IETA) survey, carbon prices in the European Union’s Emissions Trading System (ETS) are expected to rise significantly in the next decade due to more ambitious climate goals. The EU’s ETS is the largest carbon market in the world, covering around 45% of the bloc’s output of greenhouse gases and charging emitters for every tonne of carbon dioxide they issue.
Tony Blair Institute report
According to a report released by the Tony Blair Institute for Global Change, 18% of the jobs in the UK are “anywhere jobs”, or white-collar, well-paid occupations. In particular, the Institute found that Britain’s remote working boom could conduct 5.9 million jobs in IT, financial and professional services to be outsourced to other countries.