Asset Purchase Facility

October 4th at 7am EST the Asset Purchase Facility will be released. The Asset Purchase Facility is total amount of money that the Bank of England will create and use to buy assets.

This is England’s Quantitative Easing Program. In January of 2009, Chancellor of the Exchequer authorized the Bank of England to set up their Asset Purchase Facility (APF) in order to boost the economy.

Over the past few years the amount of money for the APF has increased. This past summer the amount jumped to 375 Billion pounds from 325 billion.

The current UK economic state is up for interpretation but according to Bank of England Chief Economist, Spencer Dale, we could see recovery later this year and into the early part of next year.

UK interest rates have been a steady 0.50% for more than three years. If more QE lead’s to lower interest rates, we could see a significant market move.

It’s said that more Asset Purchasing funds will be added in November but tomorrow’s release isn’t expecting any more funds. More funds added to the 375 Billion tomorrow could indeed bring volatility to the markets.

United Kingdom QE Process

Let’s look at a step by step process of how QE should function.

With our Catapult Pro service, we are currently in a couple GBP trades. Therefore, we will have our eyes on the UK news tomorrow.

Check out the UK Services Sector Article from Boris Schlossberg.

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