Home » Money

Pound, Gilt Yields Slide as BOE Rate-Increase Expectations Ease

06 August, 2017, 01:37 | Author: Melinda Barton
  • Support Mc Donnell joins protesters

"A base rate rise this year, whilst not a certainty, is possible".

Governor Mark Carney speaks at 12.30 p.m.

Jake Trask, FX research director at OFX, added:"Sterling tanked as the BoE made a decision to hold interest rates". On the back of the news the pound fell one cent against the dollar to trade at 1.3147. Shares rose and British government bond prices jumped.

Ishaan Malhi, CEO and founder of online mortgage broker Trussle, agrees that the Bank of England's decision to hold interest rates has "direct implications for every household, positive and negative".

The Bank of England warned Thursday that Britain's economy is being held back by continued uncertainty over its departure from the European Union. They have been at that level since August previous year.

The BoE cut its estimate for 2017 GDP growth to 1.7% from a forecast of 1.9% given three months ago, it said in a report accompanying the latest monetary policy update.

The BOE has revised down its 2017 growth projections, to 1.7 percent from 1.9 percent in May, saying the United Kingdom economy will remain "sluggish".

John McDonnell, the main opposition Labour Party's top economic official, attended the protest and called for the bank to set an example to employers by raising their wages. He does not provide a more hawkish statement than the meeting minutes and the QIR.

In June's meeting, three members of the MPC voted for a rise. Bank chief economist Andy Haldane surprised onlookers by voting to keep the current rate, despite speculation he may have been in favour of a rise.

In an interview with BBC Radio, BoE Deputy Governor for Monetary Policy, Ben Broadbent said: "I think there may be some possibility for interest rates to go up a little bit".

"Brexit even overshadows consumer borrowing, which the Bank has lately sounded anxious about".

"The chances of a 2017 rate hike now look dead and buried", said Jake Trask, foreign exchange research director at OFX in London.

The Bank kept its asset purchase programmes unchanged on Thursday. £78 billion has already been lent to banks through the scheme.

As a result, analysts expect there will be only two votes to hike rates this week.

With average wage growth falling below the rate of inflation since May, the Bank has revised wage growth forecast for 2018 to 3%, down from 3.5% previously.

The Bank also cut its growth forecast down to 1.7% down from 1.9% in May.

This was followed by gross domestic product figures showing growth was limited to 0.3% in the second quarter in what the Office for National Statistics described as a "notable slowdown" for the economy. The MPC now sees growth at 1.6 percent in 2018, down from 1.7 percent, while GDP in 2019 remains at 1.8 percent.

It blamed the downgrade on Britain's stubbornly weak productivity and in part on the Brexit uncertainty.

The MPC says it expects inflation to rise in the next few months, peaking at around 3% in October.

Prior to June's inflation reading of 2.6%, there had been growing clamour for a rate rise as a Brexit-fuelled increase in the cost of living ramps up pressure on hard-pressed households.



Trump defends McMaster as conservatives seek his dismissal
General Nicholson has been the commander of USA forces in Afghanistan since March 2016. Mr Trump had recently pondered a different role for General McMaster.

Showdown set in Venezuela as new assembly prepares for power
It cited Smartmatic's accusation, which President Nicolas Maduro and his government's elections council have denied. Pre-election polls showed more than 70 percent of all Venezuelans opposed a body to change the constitution.

Trump Tries To Shift Attention Away From Russia Probe
Ty Cobb, special counsel to the President, said he was not aware that Mueller had started using a new grand jury . He called it a "total fabrication". "Despite everything, I think the Trump system is beginning to work".

Spotify is headed to Xbox One
The app had an exclusivity right with Sony and their PlayStation Music service, which Spotify aimed to replace. Sony announced its exlusive deal with Spotify back in 2015 for both PS3 and PS4.

Jab Harry Met Sejal Review: SRK-Anushka couldn't save the superficial flick
However, with most of the reviews of Jab Harry Met Sejal being critical, they may spoil the party for the film in the coming days. It is hard to believe that the man who made such thinking entertainers as Jab We Met and Tamasha has created this boring film .

Europa League Draw 2017-18: Schedule of Dates for Play-Off Round Fixtures
Calvert-Lewin starred in that game as the England Under-20 worldwide scored the victor , booking Everton's place in the Europa League playoff round.

Usain Bolt prepares for his final hurrah at World Athletics Championships
His fastest 100m time so far this year is 9.95 seconds. "We definitely didn't see anything coming", McMillan said of the injury. On Tuesday, the Jamaican had told reporters: "Wayde van Niekerk is proving he is a world star".

Stephen Colbert mocks Scaramucci with Bohemian Rhapsody
The wild extemporizing doesn't surprise Jason Lahita, president and co-founder of FiComm Partners LLC in Los Angeles. This time, he changed the lyrics to "Mama, I just got canned". "Mama, Mooch didn't mean to cause outcry".

Trump Lashes Out at China on North Korea
The White House has said that "all options are on the table" as far as tackling the North Korea issue is concerned, CNN reports. Some Republican lawmakers have called for overhauling the committee to address other concerns about Chinese deals.

Florida's 1st sexual transmission of virus in 2017 - RT America
Florida's first sexually transmitted Zika infection of 2017 has been discovered, bringing the statewide number of cases to 90. The Health Department said there was no evidence that the Zika virus is being transmitted through mosquitoes in the state.