A week is a long time in currency markets. Seven days after the Swiss National Bank announced a set of measures to curb the franc’s rise, it is at it again.
Analysts were unconvinced last week’s measures would work. They are sceptical this time around too. It is also unclear what other policy options the central bank has.
The SNB said this morning that it was injecting another Sfr40bn-worth of liquidity by expanding banks’ deposits held at the central bank. It would also conduct foreign-exchange swap transactions in a further bid to increase Swiss franc liquidity. The move came after the franc shot up by – at one point – more than 6 per cent on Tuesday after the Federal Reserve’s committed to keep rates on hold for the next two years, though the Swiss authorities were already considering action.
Welcome to the live blog where we will cover the Bank of England’s Inflation Report press conference.
All times are London time; By Claire Jones in London.
This post should update automatically every three minutes, although it may take longer on mobile devices.
12.25 The live blog will now close. But continue to follow FT.com for further news and analysis of the inflation report and the governor’s comments.
12.21 The global outlook dominated proceedings at the press conference.
The governor was surprisingly outspoken about the ECB’s decision to buy Italian and Spanish debt, saying that this meant it was now at the “outer limits” of what a central bank can do.
Sir Mervyn also mentioned several times that global imbalances were behind recent events and that there needed to be structural adjustments made around the world.
In such a climate, it is wise for the governor to emphasise the limits to what the Bank’s monetary policy can do to cure the UK’s economic ills.
It is now abundantly clear that the Bank believes there has been as a supply shock. If this is the case, then the trade-off between inflation and growth will have changed.