For BOE’s Quantitative Tightening Plan, More Surprises Beckon
- QT strategy could kick off if central bank hikes in February
- Threat of further Covid-19 restrictions complicates approach
Bank of England.
Photographer: Jason Alden/BloombergThis article is for subscribers only.
Already famed for its unpredictability, the Bank of England could get a whole lot more inscrutable as a new tightening tool comes into play.
So-called quantitative tightening -- the process of unwinding years of the BOE’s government bond buying -- could kick off if the BOE hikes rates to a key level at its next meeting in February. Yet with the risk of Covid-19 restrictions threatening the economic outlook, traders are speculating on when and how the strategy will be introduced.