It has indicated that it may continue buying bonds to prevent a pensions catastrophe. Initially, the Bank of England intervened by purchasing bonds because numerous pension funds were at risk of default.
Quantitative easing will continue.
It has indicated that it may continue buying bonds to prevent a pensions catastrophe. Initially, the Bank of England intervened by purchasing bonds because numerous pension funds were at risk of default.
Governor Andrew Bailey of the Bank of England warned investors yesterday that bond purchases will cease on Friday of this week.
The UK Economic Crisis Explanation
As the newly elected Prime Minister Liz Truss and Chancellor Kwasi Kwarteng revealed their new economic strategy, the economic situation in England deteriorated. The plan featured an unfunded tax decrease proposal. As a result, the pound fell significantly against the dollar. Additionally, investors began selling long-term government bonds.
As the sell-off put numerous pension systems at risk, the Bank of England switched to quantitative easing to purchase bonds. Despite the British government's decision to abandon its strategy, the economic crisis persisted. A turn to quantitative easing was an unexpected choice considering the growing global and English inflation rates. Bailey of the Bank of England emphasised that the institution will not continue quantitative easing any longer.
Nonetheless, it appears to have informally signalled its intention to continue the easing after all.
Is A Robust Cryptocurrency Rally Possible?
The macroeconomic climate continues to dictate the stock market's price movements. Since cryptocurrencies are highly tied to the stock market, they are also dependent on the macroeconomy. Central bank quantitative tightening precipitated a huge market sell-off. Therefore, the shift by the Bank of England resulted in a robust surge.
If the UK's central bank follows through with the easing, the cryptocurrency market might experience a significant rise.
However, the Federal Reserve has a greater influence on the cryptocurrency market. It does not appear plausible that the Fed will adopt a dovish stance in the near future. Consequently, any crypto surge will be fleeting.
