Bank of England maintains policy rate

The outlook for the interest rate path in the United Kingdom after May Inflation Report from the Bank of England sees even lower than 90 percent chance for the bank to move in November.

That was in line with forecasts from economists polled by Reuters in the past week.

Investors responded to the announcement by slightly pushing back their expectations of when the BoE was likely to raise rates for only the second time since the global financial crisis.

Sterling fell on the news and was trading lower by 0.2% against the USA dollar at 1.352.

"Rate-setters have kicked the interest rate can down the road once more", Tom Stevenson, investment director for Personal Investing at Fidelity International said.

But late last month, data started to raise doubts.

With the United Kingdom inflation decelerating toward the target more quickly than expected in February and the GDP growth slowing down sharply at the beginning of this year, it was no surprise from the Bank of England to keep the Bank rate at the unchanged level of 0.50 percent in May. For now, most policymakers wanted to wait to be sure that the weakness passes quickly. This potentially leaves the door open for a rate rise in August, the next time the BoE updates its economic forecasts.

The Bank has described recent disappointing economic data as a "temporary soft patch", implying rates will rise in the fullness of time (with interest rates near an all time low, this is one of the safest of bets and only a question of timing).

Bitcoin pulls back from $10K; Buffett, Munger, and Gates hammer away
Bill Gates , the founder of Microsoft and the world's second richest person trash talked Bitcoin in an interview with CNBC . He likened it to Oscar Wilde's definition of fox hunting, calling it "the pursuit of the uneatable by the unspeakable".


Mr Carney was Bullish about the economy, suggesting that the: "underlying pace of growth remains more resilient than the headline data suggests".

Inflation was seen dropping to 2.1 percent in a year´s time, and returning to target a year later - sooner than previously thought - but only if interest rates rose by 25 basis points about three times over the next three years, as markets expect.

Lower-than-expected economic growth in the first quarter of this year of just 0.1 percent over the quarter are seen by markets and analysts to have weighed on the Bank's decision. Accordingly, the Bank has trimmed its full year growth forecast (issued in February) down from 1.8% to 1.4%.

"It's likely over the course of the next year rates will go up. that's the most likely thing to happen", Mr Carney said in an interview with the BBC, the broadcaster said.

The BoE predicted that consumer price inflation (CPI) would continue to fall, approaching the target figure of 2 percent.

Despite weak growth, the BoE sees the need for rate hikes because it thinks the economy could overheat due to long-term weak productivity and lower immigration driven by Brexit.

"The only people who throw that term at me are in this room", Carney told the news conference.

(Copyright © 2015. All Rights Reserved.)
 
Recommended

Pharma Shares Shrug Off Trump's Drug Pricing Plan
Industry experts have closely scrutinized the role that pharmacy benefit managers play in the pharmaceutical supply chain. Because of the lack of transparency in the system, it's impossible to tell exactly who benefits from rebates.

One dead as attackers slit throats of worshippers at South African mosque
The suspects also set certain rooms in the mosque alight before fleeing in their getaway vehicle, police said. One man's white robe was soaked in blood.

Ramayan Circuit's direct bus service links Ram, Sita's cradles
Indian Prime Minister Narendra Modi was on Friday accorded a 21 gun salute and a guard of honour on Friday. The five hydropower plants have been in the works for over a decade and would be a game-changer for Nepal.

David Griffin: Kyrie Irving the impetus for LeBron James' dazzling jumpers
LeBron James' blatant ownage of the Toronto Raptors has been the result of a complete dissection of the team from the ground up. That addition to James' arsenal may have been pulled from Irving's playbook, Griffin believes.

Israeli strikes used 28 planes, fired 70 missiles: Russian Federation
FSB said the men were receiving orders directly from IS in Syria, and that they were planning an attack in Moscow. The solution to this problem would be driving Iran out of Syria and restoring stability in the region ...

Kendall Jenner Thinks It's Weird Her Sister Kylie Has A Baby
Taking to her Snapchat account on Thursday, she said: 'Today is the first day that I've been allowed to work out with my trainer. I was like, You need to be around me now'.

Apple selling streaming subscriptions through its TV app
Instead of the live TV service, Apple launched the TV app in 2016, pulling together content from existing apps. Nobody knows how Apple is going to own original programming works will factor into the subscription service.

Consumer price index climbs 0.2% in April
Energy costs, which had fallen for two months, edged up 0.1 percent in April, although gasoline costs fell 0.4 percent. The Fed last week left its key interest rate unchanged while noting that inflation is nearing its optimal goal.

SpaceX launches upgraded Falcon rocket after Thursday's delay
Join Jim Siegel as he hosts SpaceFlight Insider's LIVE COVERAGE webcast leading up to the launch window, which opens at 4:14 p.m. SpaceX says this version of its workhorse launcher can be flown 10 times with only minor maintenance in between flights.

New Google features tap digital smarts
While in Android Oreo the clock is on the right side of the screen, in the Android P developer preview the clock is on the left. Along with that, there's now also a new dashboard that shows you stats of how much time you spend on a particular app.

Mark Hughes wants quick decision on Southampton future
He therefore replaced sacked Paul Clement who was shown the exit doors after poor performances this season in the Premier League. With Swansea City's fate to be sealed this weekend, there looks set to be big changes at the club regardless of the outcome.

Oil prices rise after Trump pulls out of Iran deal
Sputnik: How competitive is Iran's oil anyway? Brent crude, the global oil benchmark, was up 0.4% to trade at $77.66 per barrel. Most analysts believe that at least some nations will ignore the new American sanctions and continue buying Iranian crude.

Alexa Can Hear Commands You Can't, Which Hackers Could Exploit
Apple points out that HomePod can't do things like open doors, while iPhones have to be unlocked to execute certain Siri commands. The researcher added that he's confident he and his colleagues will eventually be able to attack any smart device.

Nadal's Nemesis, Thiem, Kicks Him Out Of Madrid Open
Based on current form, however, there was no way it would happen again on Friday in the quarterfinals of the Mutua Madrid Open. Nadal had set a record of winning 50 consecutive sets on a single surface by beating Argentine Diego Schwartzman on Thursday.

GDPR may make some users more likely to share their data
Users can choose to permanently delete specific activities, or days of activity that they do not want connected to their account. Google announced a number of updates across its platforms that will help it comply with the upcoming EU GDPR regulations.


More News

News
More News