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

Property Owners Braced For Interest Rate Hike

Worse than expected economic performance at the start of the year has led Bank of England's Monetary Policy Committee to hold off on increasing the base rate above 0.5%. BoE governor Mark Carney said: "The overall economic climate in the United Kingdom looks little changed thus far".

The Bank of England (BoE) has downgraded its predictions for inflation and economic growth in Q2, as the prospects for the United Kingdom economy remain "clouded by Brexit uncertainty". Later on, BoE's Carney told the BBC that a rate hike was "likely by the end of the year".

Higher interest rates favour savers rather than spenders, and lower interest rates favour spending and borrowing while making saving less rewarding.

The BoE said the economy would grow by 1.4 percent this year, down from the 1.8 percent it predicted in February, with slowing consumer lending and a sluggish housing market creating greater-than-usual uncertainty about consumer demand.

Practically, this largely involves the Bank adjusting interest rates to try and keep inflation at, or as close to, a target of 2%.

However, the BoE may not be comfortable with this scaling-back of interest rate expectations, which has the potential to fuel inflation through a weaker pound and cheaper credit.

Archer also said that the fall in the rate of inflation recently had been attributed by the MPC to the effects of the post-Brexit vote fall in sterling passing out of the economic figures.

Confirming a glum first quarter for the economy, industrial output barely rose in March, data showed. CPI inflation is now 2.5 percent, according to the latest figures for March. While the subdued first quarter outturn signified that the full-year growth estimates was lowered, unchanged forecasts for 2019 and 2010 meant that the central bank's broader views on the economy were left intact, stated Lloyds Bank.

"Following all the above, the Bloomberg implied odds of a rate hike in the August meeting fell 12ppt to 42%". Inflation has been falling a little faster than the Bank expected it to, and it is now expected to drop down to the target 2% within the next couple of years, regardless of any change in interest rates.

Related news:

Hot News

isis-killer-beheading-video-story-top Pelosi slams Trump move to clawback Ebola funds amid Congo outbreak
May 12, 2018 - 23:14
Bikoro has a population of about 163,000 spread over an area of approximately 1,075 square kilometers (415 square miles). The virus spreads through direct contact with bodily fluids from an infected person or even a primate or fruit bat.

isis-killer-beheading-video-story-top NASA will send small autonomous helicopter to Mars in 2020
May 12, 2018 - 23:13
Because Earth will be several light minutes away, "there is no way to joystick this mission in real time", Aung said. Mars 2020 is scheduled now to launch sometime in July 2020 with a landing slated for February 2021.

isis-killer-beheading-video-story-top White House: 'Full Day' of Trump-Kim Meetings to Be Scheduled
May 12, 2018 - 23:11
After being flown to a USA military base in Japan, the men were taken to Joint Base Andrews in Maryland. Sanders cited the recent release of three American detainees as an example of the progress made so far.

isis-killer-beheading-video-story-top Khloe Kardashian shares first pic of newborn baby True
May 12, 2018 - 23:08
The 33-year-old reality star shared the first close-up video of her baby on Saturday, May 12, just four weeks after giving birth. However, it generally seemed to have passed when Khloe attended a Cavs playoff game last weekend in support of her fiancee.

isis-killer-beheading-video-story-top Pompeo: US hopes to have NKorea as 'close partner' not enemy
May 12, 2018 - 23:06
Special rapporteur Tomas Ojea Quintana issued a statement hours after three USA prisoners released by Pyongyang arrived back home. Journalists from other countries, including the United States and South Korea, will be invited to cover the event.

isis-killer-beheading-video-story-top Netflix should revive Brooklyn Nine-Nine
May 11, 2018 - 05:11
Thank you all for this incredible outpouring of support", he wrote. "@orviv your brain is a national (global?), treasure". It starred Forte, Kristen Schaal, January Jones , Mel Rodriguez, Mary Steenburgen and Cleopatra Coleman.

isis-killer-beheading-video-story-top Gina Haspel, alleged water-boarder, could be the next Central Intelligence Agency director
May 11, 2018 - 05:10
McCain released a statement Wednesday evening asking senators to vote against Haspel because of her involvement in the George W. The statement came hours after Haspel testified before the Senate Intelligence Committee in both open and closed settings.

isis-killer-beheading-video-story-top FIRST ALERT WEATHER DAY: Hail, strong wind gusts possible Thursday
May 11, 2018 - 05:08
In the Omaha area, the weather service said Friday will bring a slight chance of showers and a high in the upper 70s. Forecasters say Friday is shaping up to be a nice spring day with mostly sunny skies and temperatures in the 70s.

isis-killer-beheading-video-story-top Expansion Knights sink Sharks to reach Conference finals
May 11, 2018 - 05:06
They just don't know where. "We got caught on the wrong end of it tonight". "You get this far and you lose, it's disappointing". Marc-Edouard Vlasic's turnover early in the second period proved costly as Jon Marchessault slipped one past Martin Jones .

isis-killer-beheading-video-story-top 8 killed, 4 injured as thunderstorm hits UP
May 11, 2018 - 05:01
Most of the deaths were caused by falling walls or trees in Etawah and Mathura districts, an official at the authority told AFP. At least 12 people were killed from a thunderstorm which lashed parts of Uttar Pradesh on Wednesday, officials said.

isis-killer-beheading-video-story-top Karnataka polls: Rahul Gandhi holds road show in Bengaluru
May 10, 2018 - 00:41
He said during the erstwhile UPA regime, the government was for all practical purposes "remote controlled" by Sonia Gandhi. The BJP leader claimed that Congress was facing defeat in Karnataka.

isis-killer-beheading-video-story-top Warriors To Face Rockets In Western Conference Finals
May 10, 2018 - 00:40
His desire to play for it all had everything to do with his move to Houston last summer, and this is his chance to follow through. But your body obviously sometimes has a mind of its own", Curry said. "Really, all the starters are playing real heavy minutes".

isis-killer-beheading-video-story-top Arbitrator upholds Mark Ingram suspension
May 10, 2018 - 00:40
Ingram enjoyed his best of seven National Football League seasons in 2017, rushing 230 times for 1,124 yards and 12 touchdowns. The bad news is that the Saints apparently won't have running back Mark Ingram for the first four games of the 2018 season.

isis-killer-beheading-video-story-top Yemen rebels fire two missiles at Saudi capital: coalition
May 10, 2018 - 00:38
It was the busiest day in US front-month contracts since August, and for Brent the busiest in nearly a month. But the USA sanctions on Iran, assuming they are effective, mark the end of the current output agreement.

isis-killer-beheading-video-story-top Ridgefield High School Ranked #5 In Connecticut
May 10, 2018 - 00:35
OSHS ranked #1476 out of the 22,000 schools examined, meaning it ranked among the top seven percent of all high school nationwide. Loveless Academy Magnet Program in Montgomery (LAMP) was named the top high school in Alabama.