Economics Weekly by Lloyds TSB

With the G20 meeting and the ECB’s interest rate decision out the way, this week’s focus is on the BoE’s MPC meeting, on Thursday, and the minutes of the Fed’s 17/18 March meeting, published Wednesday.

Focus on BoE interest rate meeting and US Fed minutes

With the G20 meeting and the ECB’s interest rate decision out the way, this week’s focus is on the BoE’s MPC meeting, on Thursday, and the minutes of the Fed’s 17/18 March meeting, published Wednesday. The G20 concluded with agreement to add another $1.1tn of cash to support the IMF in stabilising the world economy. But the ECB surprisingly delayed a full 0.5% interest cut, opting instead for a 0.25% reduction to 1.25% (another 0.25% cut is likely at the May meeting) and postponing buying of corporate bonds. This week, we will find out if the BoE plans to take further action on the banking crisis and the economy. But with official interest rates already just 0.5%, there is unlikely to be any change. Furthermore, we may have to wait for the minutes of the meeting published on 22nd April to find out initial progress on the £75bn Asset Purchase Programme and for any information to suggest whether or not the full £150bn of purchases will be required. In the US, the Fed FOMC minutes may inform on the debate around its unanimous decision to buy up to $300bn long-term treasuries and to expand purchases of mortgage and agency backed securities. The BoJ and the central bank of Australia meet, and are both expected to hold interest rates at 0.1% and 3.25% respectively. UK and US financial markets are closed on Good Friday.

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