Bank of England may have to cut interest rates

worldtraveller

The Bank of England's most dovish rate-setter, chief economist Andy Haldane, today said that the central bank's next interest rate move could be a cut rather than a widely-expected hike.

Speaking at the Portadown Chambers of Commerce in Northern Ireland Haldane said the balance of risks to UK growth and inflation are skewed "squarely and significantly to the downside".

"Were the downside risks I have discussed to materialise, there could be a need to loosen rather than tighten the monetary reins as a next step to support UK growth and return inflation to target," he said.

City AM

IMHO, there is a lot of truth in what he's saying, as I see it, but I don't realistically see any further cut. However, I stand by my view that it's very unlikely that we'll see any increase until next year. It's not just the UK of course. I expected a general fall in global growth in the second half of this year, which is starting to show up in stats now. With that said, if it's global, then with the "incestuous" relationship with many of the central banks, I can't see anyone pressing the button anyway until the likes of the Fed makes such a move, and that also doesn't seem likely, to me, until next year as well. Should things get really bad though, all bets are then clearly off!

wymondham

... so much for things getting better then!

Graham_Devon

It's just words I reckon.

We've seen all this forward guidance stuff. They say stuff simply in order to calm markets and nothing more. They will simply say something different next week - they will say whatever the market requires.

Carney's speeches are turning into a laughing joke on sites such as the telegraph and that states something.

And heres why:

The Dax is now very volatile and prone to fluctuations because it's clear that the monetary policy in the United States is being driven. It no longer dictates the rhythm but rather, it needs to turn to financial markets for orientation. The problem will now be that the longer an interest rate increase takes, the more unlikely it is. If stock markets go, up an interest rate increase at some point can become very dangerous and markets can be hit and the real economy could be severely damaged."

Robert Halver, head of capital markets at Baader Bank

Markets set the pace now. All the markets want, which has been made very clear over the past month is more and more, continuous stimulus.

MJ12

Oh so that's why pounds dropped back down today against dollars...