Kaohoon Morning Brief – 17 December 2021

1) BoE raised policy rates to 0.25%

The Bank of England raised interest rates by 15 basis points to 0.25% in a 8-1 vote from the committee, marking its first time since the pandemic era in an attempt to combat inflation and revive the U.K. economy. Meanwhile, the asset purchase program of the central bank at £875 billion remained unchanged.

Policy marker’s noted “modest” tightening is needed to face the headwinds faced by inflation which is likely to hit around 6% in April next year. Earlier, November’s inflation came is decades high at 5.1%.

 

2) ECB maintained policy rate, but will cut panmedic bond buying

The European Central Bank (ECB) made an announcement to further cut its bond purchases worth 1.85 trillion euros under the Pandemic Emergency Purchase Programme by next quarter. Meanwhile, the ECB maintained its benchmark refinancing rate unchanged at 0%. The rate on its marginal lending facility remained at 0.25% and the rate on its deposit facility was also kept at -0.5%.

Nevertheless, the bond buying under the Asset Purchase Programme (APP) will be ramped up to serve as a quantitative easing bridge through the end of the Pandemic Emergency Purchase Programme, which is scheduled to end in March 2022.

 

3) U.S. put 30 Chinese entities on blacklist over human rights violation

The Biden administration on Thursday said that it imposed trade restrictions on more than 30 Chinese entities over human rights abuse and the alleged development of biotechnologies such as brain-control weapons, but did not elaborate further on the information of the weapon.

 

4) Biden signed debt ceiling increase bill

The U.S. President Joe Biden signed a debt ceiling increase to make it into law on Thursday. The signing will ensure that the U.S. will not default on its debt for the first time. The bill was approved earlier by the Senate to raise the federal government’s debt limit by $2.5 trillion to about $31.4 trillion.