Bank of England leaves interest rates on hold and warns of Brexit uncertainty - business live

Discussion in 'Market News' started by Lily, Mar 17, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
    Likes Received:
    All the day’s economic and financial news, as the Bank of England decides to leave interest rates at 0.5% yet again

    12.15pm GMT

    Financial traders are continuing to protect themselves against sterling plunging around June’s referendum, the Bank of England says.

    Options prices continued to indicate that the price of protection against the risk of a sterling depreciation against the dollar compared with the price of protection against an appreciation was higher than in the second half of 2015.

    That negative skew had increased over the period since the Committee’s previous meeting.

    12.09pm GMT

    Happy 7th Birthday 0.5% Bank of England Interest Rate

    12.07pm GMT

    The Bank of England has warned that rising Brexit uncertainty could hit economic demand in the UK.

    In the minutes of today’s monetary policy meeting, it says that the issue has already weakened the pound.

    There appears to be increased uncertainty surrounding the forthcoming referendum on UK membership of the European Union. That uncertainty is likely to have been a significant driver of the decline in sterling [which has fallen by 9% since last November].

    It may also delay some spending decisions and depress growth of aggregate demand in the near term.

    BoE: "Sterling has depreciated by around 9% in effective terms from its peak in mid-November 2015."

    A tighter labour market and rising productivity are expected to support real incomes and consumption. Consumer confidence and most surveys of business investment are above historical averages.

    12.02pm GMT

    Breaking! Britain has entered its eighth year of record low interest rates.

    The Bank of England’s monetary policy committee has voted unanimously to leave borrowing costs at their current record low of 0.5%, extending a run dating back to March 2009.

    11.44am GMT

    With Donald Trump tightening his grip on the Republican nomination, the Economist Intelligence Unit has warned that President Trump would be a serious threat to the global economy.

    Related: 'President Trump' as big a threat as jihadi terror to global economy - EIU

    11.16am GMT

    New data has confirmed that the eurozone has fallen back into negative inflation.

    Eurostat reports that prices dropped by 0.2% across the single currency bloc in February, in line with its earlier flash estimate, and justifying the stimulus measures announced by the European Central Bank last week

    Renewed members of the deflation club in February included Germany, France and Italy. Furthermore, Spanish deflation widened markedly to 1.0% from 0.4% in January....

    The Eurozone may well edge in and out of deflation in the near term, before consumer prices gradually edge up due to reduced year-on-year drops in energy prices helped by base effects, the weak euro and ongoing Eurozone growth.

    Euro area annual inflation down to -0.2% in Feb 2016 (flash estimate -0.2%) #Eurostat

    11.06am GMT

    Please don’t get excited if you receive a message from the Bank of England governor, offering you millions of dollars.

    It’s a fraud, despite the ‘ID Card’ offered as proof that it really, really is Mark Carney (it really isn’t)

    I've seen many a scam in my days but it's really tempting when someone poses as the governor of the @bankofengland

    @JasonZubris Thank you for bringing this to our attention. Please see for info on how to report fraudulent activity

    11.00am GMT

    #BoE rate decision due at midday. Expectations are for no change, and a 9-0 #MPC vote. #GBPUSD

    10.56am GMT

    Joshua Mahony, Market Analyst at IG, says City traders are nervous ahead of the Bank of England’s big announcement in an hour’s time.

    While rates will surely remain at 0.5%, the minutes of this month’s meeting could add to the pessimistic mood, he says.

    With the BoE due to release its latest monetary policy outlook, fundamental risk remains at the forefront of trader’s minds, despite little likeliness of any policy shift.

    Given yet another OBR growth downgrade yesterday, the chances of a rate hike are slim to none, as reflected by the fact that the rates market currently sees a cut as more likely than the much vaunted hike.

    10.55am GMT

    Indonesia just followed Norway by cutting interest rates. In its case, from 7% to 6.75%.

    Indonesia cuts rates too... #centralbankoverload

    10.46am GMT

    The early optimism in the stock markets is fizzling out, following this morning’s double-dose of central bank gloom.

    The major European indices are all now in the red, after the pessimistic statements from the Swiss and Norwegian central banks earlier today.

    After +ve start, mkt focus now: Norway rate cut, gloomy CB outlooks (BoE too?), poor CAT guidance, stronger €, IT banks, Fed downside risks

    “The new rate path is more dovish than what market was pricing ahead of the meeting....

    The main reason for the lower path is weaker private and foreign demand, lower rates abroad and lower wages and prices.”

    9.08am GMT

    Newsflash: Norway’s central bank has just cut interest rates from 0.75% to 0.5%, and issued its own warning about the economic outlook.

    Governor Øystein Olsen says:

    Growth prospects for the Norwegian economy have weakened somewhat and inflation is expected to moderate further out. The Board has therefore decided to lower the key policy rate.

    “The current outlook for the Norwegian economy suggests that the key policy rate may be reduced further in the course of the year.”

    Should the Norwegian economy be exposed to new major shocks, the Executive Board will not exclude the possibility that the key policy rate may turn negative.

    Norges Bank cuts 25bps to 0.50% as expected as growth prospects for #Norway has weakened.

    8.50am GMT

    More central bank action, this time in Switzerland.

    The Swiss National Bank has just left interest rates unchanged at minus 0.75%, and warned that the country faces deeper negative inflation too.


    The global economic outlook has deteriorated slightly in recent months and the situation on international financial markets remains volatile.

    8.41am GMT

    The Fed’s sudden dovishness could yet backfire if they are caught out by US inflation pressures, says Jan Von Gerich of Nordea Markets.

    #Fed not convinced the rise in core inflation real.Let's hope they're right - abruptly turning hawkish would be ugly

    8.35am GMT

    Mike van Dulken and Augustin Eden at Accendo Markets reckon that the Federal Reserve might not raise interest rates at all this year.

    They suspect that the looming US election could help keep borrowing costs on hold through 2016 (even though policymakers expect two rate hikes).

    The Fed chair cited global risks to the US economy and inflation uncertainty, rather than the US economy itself which is performing well, as reasons for a) standing pat in March and b) just maybe standing pat for the rest of the year.

    We still think (b) is the most likely outcome given what’s on the menu in the US in the latter half of 2016 (i.e. a presidential election the build-up to which is proving even more of a circus than usual), not to mention that the FOMC needs to keep market sentiment in check.

    8.33am GMT

    The dollar is continuing to weaken this morning, driving the euro up to a five-week high of $1.1279.

    Hey waiter, I'll take the same thing as what the euro just had for breakfast! Thanks.

    CURRENCY CHECK: #Rupee opens 35 paise higher at 66.87 against the US dollar as #Fed holds rates

    8.28am GMT

    Mining companies are leading the rally in London this morning, with Anglo American surging by almost 10%.

    8.14am GMT

    Shares are rallying in Europe, and across Asia, after the US Federal Reserve was surprisingly dovish at last night’s policy meeting.

    Related: Fed announces interest rates will remain unchanged after talk of hike

    7.59am GMT

    Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    Britain’s era of record low interest rates will continue into its eighth year today, as the Bank of England meets to set monetary policy.

    Expectations are for another 0-0-9 vote to keep interest rates unchanged.

    It’s hard to imagine accompanying BOE meeting minutes turning more hawkish before the June Brexit vote given Governor Mark Carney’s warnings about the risks of uncertainty.

    Continue reading...
  2. Eliza Abrams

    Eliza Abrams Well-Known Member Trader

    Mar 11, 2016
    Likes Received:
    I genuinely don't believe Brexit will happen.

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