- Certainly not ruling out that recession risks could force BOE to cut rates next year
- But even then, will continue with QT i.e. selling of gilts
- That is consistent with the communication, QT will continue in the background
- QT does impart some further monetary tightening, at the margin
- But it is a background event compared to changes in the bank rate
In case you missed it, the BOE announced that it will start selling some of the bonds it purchased during the QE period since 2009. The stock of reserve liabilities held by the BOE stands at £947 billion as of last week. But Ramsden says that they will proceed in a "gradual and predictable" manner in terms of reducing the balance sheet.
