20
Mar
BOE reassures but will not rule out recession in the UK
Likely recession in H1. BOE lowers rates and increases asset purchases. Swift rebound of long-term rates. New opportunities in real estate and equities.
Key points
- Boris Johnson does a U-turn and gives up on his so-called herd immunity strategy
- U-turn in terms of economic policy: fiscal stimulus package
- BOE announces exceptional measures
- Two consecutive key rate cuts to 0.1%
- Additional 200 billion in asset purchases
- Leading indicators will not help assess the real risks of a recession
- Expected deterioration of household confidence
- Volatility affecting capital market too
- Rise in yields from 0.2% to 1% in only two weeks
- Low probability of recovery for the pound
- Opportunities in real estate and equities after adjustment of values of close to -40%
