Forex Flash: BoE to increase asset purchase facility by £75bn

Forex Flash: BoE to increase asset purchase facility by £75bn

<!--TITOL:

Forex Flash: BoE to increase asset purchase facility by 75bn - UBS

FITITOL--> FXstreet.com (Barcelona) - According to Geoffrey Yu, UBS strategist, it is expected that the BoE will increase their asset purchase facility by £75bn (cons. £50bn) during their monthly MPC meeting on Thursday.

Under Geoffrey view, "the need for greater stimulus to complement the BoE's efforts to optimize credit allocation is seen as a more assertive strategy to bounce back from the current technical recession in the UK, though the BoE may also choose to highlight that with external conditions remaining a strong headwind for the UK, it will take time for the results of the new measures to show."

UBS economists note that the MPC will announce a plan that will extend until the November meeting: "The committee is unlikely to announce a small plan in July and then revisit the programme at the August meeting when it publishes its latest economic forecasts. If that is the case, a £75bn plan over four months is exactly the same pace as QE2 announced in October last year a nd actually somewhat slower than the start of QE1 in March 2009 (£75bn over three months)."