re: Official CryptoTalk Thread

Bank of England Says ‘Modest Tightening’ Needed as Inflation Set to Spike

quote:

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The Bank of England decided to keep its monetary policy unchanged on Thursday, but warned that some “modest tightening” was likely to be needed as it expected inflation to spike higher than expected.

The BoE unanimously voted to keep its key interest rate unchanged at 0.1%, and voted by a 7-1 majority to maintain the ceiling of its asset-purchasing program at £895 billion ($1.25 trillion). The pound pulled back slightly, trading 0.2% up at $1.3918, after initially making gains following the decision.

Although there was just one dissenting voice, there was a change in tone, albeit not a dramatic one. The central bank’s monetary policy committee (MPC) stressed that it expected inflation to prove to be transitory, as it has in the past.

However, it said it now saw inflation rising to 4% in the fourth quarter of 2021, considerably above its 2% target. It is also a significant jump from its May forecast for 2.5% inflation in the final quarter of the year. U.K. inflation jumped to 2.5% in June after Prime Minister Boris Johnson lifted the majority of Covid-19 restrictions.

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the inflation narrative in the fiat markets just gradually continues to trickle towards larger forecasts but with only talk of one hypothetical day in the future taking on more conservative monetary policy

it is really hard not to be very bullish in a space with projects that are inherently scarce or at the very least operating with principles that counter inflationary pressures embedded at their core