by Wolf Richter
Wolf Street
Brazil and Russia caught up via shock-and-awe rate hikes. But most central banks fell further behind. Then there are the reckless laggards.
The Bank of England today, February 3, started QT (Quantitative Tightening, the opposite of QE) and raised its policy rate by 25 basis points, to 0.50%, the second hike in a row, after having raised by 15 basis points at its December meeting. The hawkish part was how it happened: A bare majority of five members of the Monetary Policy Committee voted for the 25-basis-point hike, while four members voted for a 50-basis-point hike!
The BOE voted unanimously to start QT by reducing its holdings of government bonds by allowing maturing bonds to roll off without replacement, and by selling its corporate bonds outright. In terms of the corporate bonds, the BOE is following in the Fed’s footsteps which sold its corporate bond holdings entirely by November 2021.