BoE keeps rates on hold pending economy's performance in 2H2018

11 May, 2018, 04:21 | Author: Irvin Gilbert
  • Property Owners Braced For Interest Rate Hike

The Bank of England's Monetary Policy Committee have voted 7-2 to maintain Bank Rate at 0.5%, the same ratio as in its last meeting.

The rise in the oil price, now up over 50% since September last year, hasn't as yet prompted a re-evaluation in this year's economic forecasts but as can be seen from recent weak consumer data, in Europe, the United Kingdom, as well as the USA, it could well be starting to have an effect in some of the more recent retail sales numbers.

Bank Governor Mark Carney had already weakened expectations for a May rate rise when he signalled last month that "mixed" economic data could delay the increase. There has been no sharp increase in swap rates or fixed rates in the mortgage market.

In the first three months of the year, the British economy barely grew, expanding at a quarterly rate of just 0.1 percent, with the construction sector faring particularly badly.

The Pound Sterling (GBP) exchange rate tumbled against the majority of its peers on Thursday as the Bank of England left its monetary policy unchanged in May.

For 2019 and 2020, it predicted growth of 1.7 per cent, down from 1.8 per cent in its February forecasts.

Iranian forces fire on Israeli positions in Golan - Israeli army
According to reports, Israeli fighter jets entered Syrian airspace and struck Iranian missiles aimed at Israel. On Wednesday, Netanyahu said Iran was calling for Israel's destruction and therefore posed a threat.

"Given previous remarks from the MPC on the timing and the path of future rate hikes, the question now remains as to when the Committee will look to increase rates in 2018, assuming that growth picks up again in the coming months".

Recent data "had been consistent with a temporary soft patch, with few implications for. the outlook for the United Kingdom economy", most of the BoE's rate-setters said. The BOE is anxious that weak productivity growth and subdued investment since the 2016 Brexit vote make it hard for the economy to meet nearly any strengthening of demand without overheating.

"With a May rise in rates looking like a formality in April, the recent turnaround has proven that the outlook remains constantly uncertain and whether to raise continues to be a tricky decision for the Bank of England".

"But while it held fire this month, we can not yet rule out further rate rises in the near to medium-term".

Meanwhile the USA dollar fell as more signs emerged of U.S. inflation cooling down, with the latest sign being a soft Consumer Price Index reading, which followed lower-than-expected Producer Price Index on Wednesday and weak wage growth last week. It said this would come in the form of two 0.25% rate hikes, believed to be in May and November.

'At this meeting, the costs to waiting for additional information were likely to be modest, given the need for only limited tightening over the forecast period to return inflation sustainably to the target'. Thursday's forecast shows inflation should drop to 2.4 percent by year-end, instead of the previously forecast 2.7 percent. The group's chief executive Carolyn McCall noted that the group had "started the year well both on and off screen".

Recommended:



Popular

Former boss of Chinese insurer Anbang jailed for 18 years
The funds were transferred to companies that Wu personally controlled to repay debts or for "personal expenditures", the judges said.

Uber self-driving auto saw but ignored pedestrian in deadly Arizona crash
According to the New York Times , Uber's robotic vehicle project "was not living up to expectations months before [the crash]". The company has also been plagued by claims that the head of the self-driving division put security second.

A Woman Claims She Was Raped At Chris Brown's House
She claims that when she arrived her phone was taken away because Brown didn't want anyone to have their phone. Allred is expected to appear at a news conference today (May 9) and explain Jane Doe's lawsuit further.

European businesses most affected by USA sanctions on Iran
And one of the firms expected to suffer from this is US-based Boeing, the largest commercial airline manufacturer in the world. While abandoning deals in Iran could hurt financially, they would not likely have a lasting impact on the companies.

Steam Games to be Playable on Mobile Devices via Free App
Many might be unaware that Steam even has a video section, but you can buy a ton of different films on the digital service. Valve also announced the Steam Video app, which will provide access to Steam's video library on the same platforms.

How will the sun die? A new study has some ideas
However, the new model proves that it's actually quite easy for old, low mass stars to form bright planetary nebulae. If the thought of our sun's demise has kept you up at night, this settles the score after almost 25 years.

After the Credits: 'Avengers: Infinity War'
The movie in the earlier weeks also ran a solo affair as there was no competition from films like 102 Not Out and Omerta. Although Avengers 4 will introduce new characters to the team, Adam will not be one of them.

Why Walmart Is Investing $16 Billion in This Indian E-Commerce Giant
He said: "We are confident this group will provide Flipkart with enhanced strategic and competitive advantage". Walmart said it plans to fund the India deal through a combination of newly-issued debt and cash on hand.

Miranda Kerr And Evan Spiegel Welcome Baby Boy
The name was apparently chosen because it is the name of Evan's grandfather, a prominent attorney in San Francisco . TMZ reported this morning that the 35-year-old model welcomed a son named Hart Kerr Spiegel on May 7th.

Mahathir's opposition wins majority in Malaysian parliament
Mahathir said in his speech that Malaysia is faced with many problems that only could be solved with the change of a government. The swearing-in ceremony is likely to be held on Thursday, according to BBC .