Makhlouf: No Second-Round Effects from ECB Policy Yet

European Central Bank (ECB) board member Yannis Stournaras's colleague Idris Makhlouf said second-round effects, which refer to the broader impact of monetary policy decisions, are not being seen yet. This is a crucial point for policymakers as it suggests that the current interest rates may be sufficient to control inflation without needing further increases. The statement was made in relation to the ECB's previous rate hikes.

The mention of second-round effects comes as the Federal Reserve (Fed) has recently increased interest rates by 25 basis points (bps), bringing them to a range of 3.75-4.00%. This move was expected and marks the Fed's fourth hike this year, with the next meeting scheduled for October.

The BoE announcement also mentioned that APF gilt sales will be paused until April 2027. The pause in gilt sales is likely to have a significant impact on the UK economy, as it affects the government's ability to finance its debt.