Daily Trends Now
Daily Trends Now


Will the Bank of England raise interest rates today?

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 bank's quarterly economic forecasts suggest the next increase may not happen until the latter part of this year, though. The currency was trading on a low against the dollar of $1.3499 before easing to relative levels.

Professor Peter Urwin, director of the Centre for Employment Research, said the decision to hold rates down had not been a foregone conclusion.

The Royal Institution for Chartered Surveyors said that April saw a slight decline in average prices across the United Kingdom, but but quite big falls in values in London - particularly among homes in the £500k to £1million bracket.

The widely anticipated hike could be pushed back due to a very weak first quarter of just 0,1%, suggesting the British economy has hit on a major break.

"There was value in seeing how the data unfolded over the coming months, to discern whether the softness in Q1 might persist", they said.

The decision comes despite the Bank's governor, Mark Carney, having earlier signalled that a rate rise was incoming soon. We expect an acknowledgement from Carney that economic conditions have worsened since the last meeting in March, while there is a good chance that we'll see a downward revision in the 2018 growth forecast, although this may be largely priced in. But Governor Mark Carney lowered expectations after dovish comments he gave in an interview with the BBC, referring to data that was coming in on the "softer side".

Analysts, who had estimated the USA could impose a fine of up to $12 billion, said the bank could reinstate a dividend.




The Bank of England has kept its main interest rate on hold as a run of soft economic data has made it more cautious about the outlook for Britain.

This follows disappointing GDP figures at the start of this year with growth of just 0.1%.

However, slowing consumer lending and a sluggish housing market created greater-than-usual uncertainty about consumer demand, the BoE said.

The Bank of England has elected to keep the interest rate at 0.5% despite continued speculation that a rise is imminent. Policymakers are not likely to take hikes off the table this year, as some forecasts have attached credence to.

The inflation forecasts also show that any lost economic output in the first quarter would not be recovered throughout the remainder of the year, despite expectations for the second quarter to be "commensurately stronger".

While markets had already effectively ruled out the prospect of an interest rate hike the Pound still came under fire after the Monetary Policy Committee (MPC) voted to leave policy unchanged. They no longer price in a full 25 basis point rate rise in December, according to Reuters data. In February, Mr Carney said rates might need to rise somewhat faster than markets had expected.

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