Bank of England Needs to Cook Its Monetary Porridge Just Right
Sterling markets remain vulnerable after last week’s meltdown.
Not too hot, not too cold.
Photographer: Dan Kitwood/Getty Images
After UK markets suffered a flash crash in the pound and a truly scary meltdown in long-maturity gilts last week, sterling assets remain vulnerable to either monetary-policy surprises or more fiscal shocks. The Bank of England needs to deliver a Goldilocks interest-rate move at its next meeting on Nov. 3., tightening by neither too much nor too little.
The Federal Reserve is expected to raise its key borrowing costs by 75 basis points the day before the BOE meets, while a similar move is expected from the European Central Bank on Oct. 27. British policy makers should follow suit; the UK has had quite enough of standing out from the crowd for this year.