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Bank of England shocks markets with close vote on rate hike
worldtraveller
Posts: 14,013 Forumite
The Bank of England shocked financial markets on Thursday when it said three of its policymakers voted for an interest rate hike, the closest it has come to raising rates since 2007, despite signs of a slowdown in Britain's economy.
The unexpectedly tight 5-3 vote adds questions over monetary policy to uncertainty over Britain's political outlook since Prime Minister Theresa May failed to win a parliamentary majority in an election last week.
BoE policymakers Ian McCafferty and Michael Saunders joined previous rate rise advocate Kristin Forbes in voting to reverse the BoE's decision last August to cut rates to a record-low 0.25 percent, the BoE said.
Governor Mark Carney and the four other members of the Monetary Policy Committee voted to leave rates unchanged.
Reuters
The unexpectedly tight 5-3 vote adds questions over monetary policy to uncertainty over Britain's political outlook since Prime Minister Theresa May failed to win a parliamentary majority in an election last week.
BoE policymakers Ian McCafferty and Michael Saunders joined previous rate rise advocate Kristin Forbes in voting to reverse the BoE's decision last August to cut rates to a record-low 0.25 percent, the BoE said.
Governor Mark Carney and the four other members of the Monetary Policy Committee voted to leave rates unchanged.
Reuters
There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...
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Comments
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I am in the process of getting a 10 yr fixed mortgage, if things had gone smoothly, it should have been completed by now.
I just hope the interest rate does not increase, before I sign on the dotted line, in a few weeks time.0 -
sevenhills wrote: »I am in the process of getting a 10 yr fixed mortgage, if things had gone smoothly, it should have been completed by now.
I just hope the interest rate does not increase, before I sign on the dotted line, in a few weeks time.
Even if they withdraw the product, they may still proceed with current ongoing applications, good luck.Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
The time is not right for an interest rate rise, Bank of England governor Mark Carney has said.
In his Mansion House speech, Mr Carney said: "From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment [rate rises].
BBC News
There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...0 -
He's become extremely political. Brexit or no brexit, he shouldn't be giving his personal opinion and forecasts on that as a reason not to do anything with monetary policy. We all know he was a staunch remainer.
Anyway, howcome he concentrates on one figure one month and then another the next?
He was warning on excessive debt last month - he's not even mentioned it this month. He seems to refer back to any indicator that gives justification for lower rates from one month to the next.
10 years on and we are still on emergency rates - based on "pick any indicator you like not performing as well".0 -
The Bank of England moved closer to ending its decade-long emergency support for Britain's economy on Wednesday when its chief economist, Andy Haldane, said he was likely to vote for an interest rate hike this year.
The surprisingly hawkish tone of Haldane in a speech added new uncertainty about monetary policy at a time when Prime Minister Theresa May is struggling to form a stable government and as Britain begins its Brexit negotiations with Brussels.
Investors have been on edge about the possibility of a policy shift in the world's fifth-biggest economy since last week when the BoE's policymakers voted by a narrower-than-expected margin of 5-3 to keep rates on hold at a record low.
All three of the votes in favour of higher rates were cast by external rate-setters. Haldane's comments on Wednesday represented the first sign of a shift in thinking among the internal members of the Monetary Policy Committee. Until now, he has been seen as largely supportive of keeping rates low.
Reuters
So, basically, Carney may well be outvoted on a rise sooner than later! :T
IMHO, he hasn't shown himself to be anything much more than pointless anyway, since his appointment, so, maybe the hawks will prove correct in their actions.There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...0 -
Oh I don't know, he makes "95% wrong" Merv look like a "superstar banker"...worldtraveller wrote: »IMHO, he hasn't shown himself to be anything much more than pointless anyway, since his appointment, so, maybe the hawks will prove correct in their actions.0 -
http://www.bbc.co.uk/news/business-40354879worldtraveller wrote: »The Bank of England moved closer to ending its decade-long emergency support for Britain's economy on Wednesday when its chief economist, Andy Haldane, said he was likely to vote for an interest rate hike this year.
The surprisingly hawkish tone of Haldane in a speech added new uncertainty about monetary policy at a time when Prime Minister Theresa May is struggling to form a stable government and as Britain begins its Brexit negotiations with Brussels.
Investors have been on edge about the possibility of a policy shift in the world's fifth-biggest economy since last week when the BoE's policymakers voted by a narrower-than-expected margin of 5-3 to keep rates on hold at a record low.
All three of the votes in favour of higher rates were cast by external rate-setters. Haldane's comments on Wednesday represented the first sign of a shift in thinking among the internal members of the Monetary Policy Committee. Until now, he has been seen as largely supportive of keeping rates low.
Reuters
So, basically, Carney may well be outvoted on a rise sooner than later! :T
IMHO, he hasn't shown himself to be anything much more than pointless anyway, since his appointment, so, maybe the hawks will prove correct in their actions.Weak wages
In his speech Mr Haldane also examined why UK wage growth has been weak in recent years.
He said that longer-term factors included a decrease in unionisation and an increase in self-employment, flexible and part-time working, and zero-hours contracts.
He said technology and globalisation "may have weakened the bargaining power of workers".
He added that "the impact of the financial crisis on slack in the labour market" was also a factor.
Elephant in the room - how come with such low UK unemployment have we snot seen wage rises, surely nothing to do with the 10m plus unemployed english speakers in europe who are free to work here.
Haldene knows this hence his expectation that the slowing and reversal of this migrant flow may lead to wage increases but he is too politically correct to say so. Must be thinking of his next job with a hig firm that benefits frombeing able to source labour from anywhere in the eu rather than having to pay more for uk talent. :mad:I think....0 -
worldtraveller wrote: »The time is not right for an interest rate rise, Bank of England governor Mark Carney has said.
Just 8 days later, Carney hints at rate rises...
http://www.bbc.co.uk/news/business-404278650 -
Elephant in the room - how come with such low UK unemployment have we snot seen wage rises
For the two years prior to the Brexit vote wages were rising strongly in real terms at around 2% above inflation.
The Brexitary GBP devaluation has ended that of course...“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
http://www.bbc.co.uk/news/business-40354879
Elephant in the room - how come with such low UK unemployment have we snot seen wage rises,
Productlvity is low. People prefer to buy and rent houses than do something which actually creates wealth.0
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