A man speaks on his phone outside the Bank of England in London, Britain July 5, 2016. REUTERS/Dylan Martinez
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The Bank of England needs to act "promptly as well as muscularly" to stimulate the economy and boost confidence, its chief economist said Friday, a day after the central bank upset markets by not cutting rates.Investment bank J.P. Morgan changed its forecast for British interest rates after Haldane's speech, predicting the Bank of England would cut rates to zero next month, rather than to 0.25 percent.J.P. Morgan economist Allan Monks said he expected the BoE to buy 75 billion pounds ($100 billion) more government bonds, and either extend its Funding for Lending Scheme, which offers banks cheap credit, or buy corporate bonds again as it briefly did in the financial crisis.Sterling's sharp fall since the EU vote meant it was possible consumer price inflation – just 0.3 percent in May – could overshoot the central bank's 2-percent target in the foreseeable future, Haldane said.
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