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It might be appropriate to reduce stimuli soon – Michael Saunders

The official of the Bank of england (BoE), Michael Saunders, said Thursday that the question of reducing the asset purchase program will soon be under consideration at the meetings of the Monetary Policy Committee. These comments generated a significant rise in the pound.

Saunders stated that it could be appropriate soon to reduce some of the monetary stimulus. “Options to withdraw the stimulus include reducing QE (ending it in the next month or two) and / or new policy measures next year,” he added.

Regarding the interest rate, the official said that if it goes up in the next year or so, any increase is likely to be relatively limited.

On economic activity, Saunders said he appears to have recovered slightly faster than anticipated in May.. The risk is that the output gap will close earlier than previously expected.

GBP / USD jumped above 1.3850 and approached 1.3900 following these comments.

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