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Australia's Central Bank Maintains Its Cash Rate At 0.1% / In order to stabilize inflation, the Bank of England has a very likley to raise interest rates next year

Australia's Central Bank Maintains Its Cash Rate At 0.1%

After the interest rate meeting, the Reserve Bank of Australia announced that it will maintain the cash rate unchanged at 0.1% and will reduce the weekly bond purchases from a $5 billion to a $4 billion as planned. However, at the same time, the debt purchase plan was extended to at least February next year, mainly considering that the Delta variant virus will bring the prospect of economic recovery and the uncertainty brought by it. In addition, the Reserve Bank of Australia does not expect to raise interest rates before 2024. Among them, the outlook for employment and real inflation is still relatively pessimistic. The Reserve Bank of Australia said that it will continue to review its bond purchase plan in the future, together with a series of measures such as low interest rates and government bond yield targets, which can provide adequate and continuous support for the local economy. The Reserve Bank of Australia has once again extended its bond purchase plan, reflecting that its policy stance remains accommodative. Therefore, after the interest rate meeting, the Australian dollar immediately weakened.

In order to stabilize inflation, the Bank of England has a very likely to raise interest rates next year

Sanders, the Bank of England’s monetary policy committee member, said at an online event that he was worried that when the UK’s annual inflation rate rises to 4%, if the central bank continues to purchase assets, it may lead to an increase in medium-term inflation expectations, and the result is likely to be greater later. Monetary policy tightening by a large margin may limit the central bank’s room for timely response when the economy needs more stimulus next time. In addition, Sanders reiterated that if the economy continues to grow and inflation becomes more stable, the Bank of England may need to raise interest rates next year.

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