Asset Purchase Facility (APF) ceiling, November 2024
The Asset Purchase Facility (APF) is a monetary policy tool used by the Bank of England to stimulate the economy by purchasing government bonds and other assets. The APF was launched in 2009 in response to the global financial crisis and has been used since then to support the economy during periods of economic weakness.
The APF is currently subject to a ceiling of £895 billion, which was set in November 2021. The Bank of England has announced that it will review the APF ceiling in November 2024.
The Bank of England’s Monetary Policy Committee (MPC) will consider a number of factors when reviewing the APF ceiling, including:
- The economic outlook
- The level of inflation
- The risks to financial stability
The MPC will also take into account the views of the government and the financial markets.
The Bank of England has said that it is likely to reduce the APF ceiling in November 2024. This is because the economy is expected to have recovered from the COVID-19 pandemic and inflation is expected to have returned to the Bank of England’s target of 2%.
The reduction in the APF ceiling is likely to have a number of consequences, including:
- Higher interest rates
- A weaker pound
- Lower asset prices
However, the reduction in the APF ceiling is also likely to be positive for the economy in the long run. This is because it will help to reduce inflation and make the economy more resilient to shocks.
The Bank of England’s decision on the APF ceiling will be closely watched by investors and economists. The decision will have a significant impact on the UK economy and the global financial markets.
Asset Purchase Facility (APF) ceiling, November 2024
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