Does the Bank of England really dare to raise interest rates?The daily increase in the number of new crowns confirmed to exceed 40,000 for eight consecutive days, may reach 100,000 this winter |

Original title: Does the Bank of England really dare to raise interest rates?The daily increase in the number of new crowns confirmed to exceed 40,000 for eight consecutive days, may reach 100,000 this winter

　　News from the Financial Associated Press (Shanghai, edited by Xiaoxiang),Recently, British news has always taken a place in the global financial media: in the European energy crisis, the UK’s electricity prices have risen the most rapidly; in the global supply chain crisis, the shortage of truck drivers in the UK is also the most serious. The British government Even the army had to be dispatched to transport fuel to the gas station. Soaring energy prices and the prospect of high inflation triggered by the supply chain crisis have forced the Bank of England to prepare to raise interest rates earlier this year to ease the pressure.

However,The British economy, which is about to be completely chaotic right now, may still face another “old” risk that lingers: the epidemic!

According to data released by the British Ministry of Health, as of October 20, local time, there were 49,139 new confirmed cases of new coronary pneumonia in the UK in a single day, again approaching the 50,000 mark, and the cumulative number of confirmed cases reached 8,589,737; new deaths in a single day There were 179 cases and a total of 139031 deaths.

　　In the past eight days, the number of new coronavirus infections in the UK every day has exceeded the 40,000 mark, Second only to the United States. The 7-day average number of new cases in the UK has risen sharply from about 34,000 in early October. At the same time, the number of people hospitalized due to the new crown has also surged by 11% in a week.

　　Why did the British epidemic suddenly counterattack?

In the context of the slow decline of new crown cases in most parts of the world, the momentum of the British epidemic is undoubtedly particularly eye-catching. Many people in the health field have issued a warning: Britain may usher in a very challenging winter.

　　According to the analysis of local British media, the counterattack of this round of the British epidemic may have been affected by many factors.First of all, the current mask penetration rate in the UK is much lower than that of other European countries such as Germany, France, Spain and Italy; the UK also relaxes epidemic restrictions earlier than most countries in Western Europe.

Since this summer, people in England, Wales and Scotland have been able to freely enter and exit nightclubs and participate in unlimited parties. According to survey data from Imperial College London, compared with neighboring European countries, Britons are slightly more likely to take public transport and less likely to avoid going out.

There was a time when the United Kingdom led the world in vaccination, but recent vaccination rates have continued to stagnate.

In the first two weeks of October, the proportion of people aged 12 and over in the UK who received at least one dose of the vaccine hardly changed. At present, the proportion of the fully vaccinated population in the UK has fallen out of the top ten in the world. A study showed that the protective effect of vaccines against virus infections usually weakened significantly after five or six months. Israel, which initially led the world in the number of vaccinations, encountered a similar dilemma.

Of course, another reason for the counterattack of the British epidemic may be the spread of the delta subspecies virus AY.4.2. This new variant was first discovered in July this year. Compared to Delta, it contains mutations that may give the new coronavirus a survival advantage. A report from the British Health and Security Agency pointed out that as of the week of September 27, the number of confirmed cases caused by the mutant strain AY.4.2 accounted for 6% of the total, and it was “on the rise.”

　　Will the number of cases increase this winter or exceed 100,000?

　　At a press conference held on Wednesday, British Health Secretary Javid said that the new crown epidemic is far from over, and people may see as many as 100,000 new confirmed cases in a single day in the UK one day this winter. But he also pointed out that the British government has no plans to tighten epidemic prevention measures.

Javid said, “The British government is concerned about the surge in confirmed cases of the new crown and the data on deaths. We will remain vigilant and be prepared for all possible situations. However, we are not yet ready to initiate the “response” including measures such as mandatory wearing of masks. New Crown Epidemic: Plan B of the “Autumn and Winter Plan” is a backup plan when the epidemic worsens severely.”

Downing Street also said earlier this week that it is closely monitoring the rising number of cases, but the cabinet has not yet discussed emergency measures. The British Secretary of Commerce Kwasi Kwarteng pointed out in an interview with the media on Wednesday that the government’s so-called Plan B is not yet time, and the focus should be on more injections.

The “Responding to the New Crown Epidemic: Autumn and Winter Plan” announced by the British government earlier includes two plans A and B. Among them, vaccination is the primary line of defense arranged by Plan A; Plan B includes mandatory wearing of masks in some public places, recommending to work at home, and compulsory presentation of vaccination certificates when attending certain venues.

The British National Health Service (NHS Confederation) recently warned that if the government wants to maintain public health and prevent hospitals from being overcrowded this winter, it must “immediately” reimplement some restrictions on the new crown virus. The coalition calls on the British government to implement an epidemic prevention plan as soon as possible, which includes mandatory wearing of masks in crowded and enclosed spaces.

　　Does the Bank of England really dare to raise interest rates now?

　　The current resurgence of the epidemic in the UK will undoubtedly make the Bank of England, which is already feeling extremely entangled between the soaring inflation and the unstable economic recovery, feel more and more “headed”!Although the current development of the British epidemic has not yet fully affected the daily lives of the people, and the impact on the economy is temporarily limited without strengthening the blockade measures, who can guarantee that the future development of the epidemic will not get worse?

And you know, after the Bank of England Governor Andrew Bailey issued the clearest signal to raise interest rates so far last weekend, the market is almost 100% convinced that the Bank of England will start raising interest rates before the end of the year. The market has almost completely digested the expectation of a 15 basis point increase in interest rates at the latest in December this year, and it is expected that the possibility of a 15 basis point increase in interest rates as soon as November will increase to more than 50%.

In a monthly survey released by Deutsche Bank earlier this week, the central bank’s decision-making errors were listed as the top three most risky in the market, and the main concern for the Bank of England is that the central bank’s actions in tightening monetary policy Too hawkish, causing irreparable economic losses.

　　What’s interesting is that market pricing now also shows that traders are setting prices for the Bank of England’s “mistakes”——Indicators of longer-term interest rate expectations, such as the three-year forward interest rate, have been lower than the shorter-term forward interest rate for the first time since 2008. This inversion means that the market is actually betting that the Bank of England will cut interest rates again after a series of interest rate hikes. Due to the rapid economic slowdown, the Bank of England will eventually be forced to provide new stimulus measures.

Analysts said that considering the shortage of energy prices and labor in the British economy, the Bank of England does have a theoretical basis for raising interest rates. At the same time, there are still many uncertainties in the British economy. The epidemic is repeated and the number of immigrants. Decline, financial support decreases, and the current risk of raising interest rates is also not small.

“Does the Bank of England make policy mistakes? The market seems to think so,” said Mike Riddell, senior portfolio manager for Allianz Global Investors. “History shows that bad things happen soon after the yield curve starts to reverse, and this is what is currently priced at the front end of the UK interest rate curve.”

In the history of the Bank of England, there are actually not a few cases where the Bank of England finally “launched pigeons” after it released a signal of monetary policy change. The former Bank of England Governor Carney even has a notorious reputation as an “unreliable boyfriend” in the financial market. The experience of the Bank of England “flying pigeons” in the end often hurts the British financial market.

　　At present, although the Governor of the Bank of England Bailey has fallen to the interest rate hike camp, the proportion of eagles and pigeons in it is still relatively doves. Perhaps at the moment, no matter whether it is raising interest rates or not, for the Bank of England, no one option is completely correct!

Editor in charge: Wang Ting