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UBS View Following the BOE MPR

BOE
  • UBS expects "the MPC to remain in a wait and see mode over the coming weeks. However, as the job retention scheme comes to an end in October, a combination of higher unemployment and social distancing measures are likely to weigh on household consumption and fixed investment slowing the pace of recovery. As a result, we expect the MPC to ease the terms of its TFSME scheme (by lowering the fee) and announce additional £100bn of asset purchases to last until June 2021 at its meeting on 5 November."
  • On QE pace, UBS notes that the slowing to GBP4.4bn per week is in line with its previous forecast and "consistent with previous guidance that purchases will end around the turn of the year"

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