arabianights
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The BOE doesn't actually have to state that it's uniwning QE, does it?
The BOE doesn't actually have to state that it's uniwning QE, does it?
arab, remind me tomorrow about this question... I'll tell you.
Well, I am not entirely sure what you might mean, but one reason is that a VERY large proportion of UK debt is inflation-linked. As to the budget deficit, I imagine it's also quite large in real terms (as opposed to nominal).Another retarted question whilst you and others are present; if *we* can thoeretically 'get rid of' the effects of Q.E. through future inflation why cant *we* do the same with the ideological weapon of mass delusion that is the defecit and the huge UK stuctural debt?
Well, I am not entirely sure what you might mean, but one reason is that a VERY large proportion of UK debt is inflation-linked...
This might be technically correct, if you calculate it on the basis of simple notional. However, such a calculation is irrelevant. In terms of all-in duration, it's smth like 40%, if memory serves. Generally, out of all sovereign debt issuers, UK has the highest proportion of index-linked debt.No it's not, it's quite a small proportion, from memory less than a quarter.
How about this? It's extremely unlikely that they will hike all the way to a "neutral" rate without selling their gilts. My central scenario is that they do a few hikes (one or two) and then start selling. As to the language, I think general hawkishness/dovishness stuff applies, since QE is just monetary policy to them. So they would probably try to do smth similar on the way out as they did on the way in. My guess is that it will be announced after one of the meetings and will be done in an orderly fashion.hi martingoul
thats sort of what i meant, reducing how much they hold from 200 to 175 by selling 25.
what do you think will be first? hike or sell-backs?
(afterwards: or, what would you look for in the minutes or q&a sessions that some might be sold off? I mean there is hawkish vs. dovish for hikes/cuts, but ive never been trading while QE before this so what is the language for that? "were p!ssed off having to carry all these bonds around"?![]()
I don't really understand what you mean by "QE paid back"? QE is not an investment or a purchase, it's an instrument of monetary policy.OK, so *we* can be told by the govt when and how we're going to get our investment back in RBS & Lloyds/HBOS and how they're going to supposedly chip away at the defict by cuts etc..But how is the 500bl Q.E. to be paid back other than through kicking it into the long grass for generations to come? On that basis why aren't we as relaxed about the defict and the huge overall debt of a trillion plus? Also, please bear with me, why couldn't the govt of the day issue a bond of sorts to cover the other elephant in the room, public sector pension guarantees of circa 1 trillion?
How about this? It's extremely unlikely that they will hike all the way to a "neutral" rate without selling their gilts. My central scenario is that they do a few hikes (one or two) and then start selling. As to the language, I think general hawkishness/dovishness stuff applies, since QE is just monetary policy to them. So they would probably try to do smth similar on the way out as they did on the way in. My guess is that it will be announced after one of the meetings and will be done in an orderly fashion.