The Monetary Policy Committee will probably use its policy announcement on Thursday 7th May to send a strong signal that it will continue to stand behind the gilt market. It may even extend quantitative easing And even if it doesn’t do that now, we suspect it will have to announce more QE, or perhaps yield curve control, in the coming months to keep gilt yields low and support the economic recovery in order to try and raise inflation back to the 2% target.
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