News Videos
International Edition


June 28, 2017

Breaking News, World News and Taiwan News.
About Us
Contact Us

Bank of England set to hold interest rates at a record-low 0.50 percent

LONDON--The Bank of England (BOE) is forecast Thursday to freeze interest rates at a record-low 0.50 percent, amid caution over the strength of Britain's economic recovery, analysts said.

The central bank's nine-strong Monetary Policy Committee (MPC) is also expected to maintain its quantitative easing (QE) stimulus at 375 billion pounds (US$628 billion).

Policymakers will hold a shortened meeting, on Wednesday instead of over two days, to allow some members to attend the International Monetary Fund's spring meetings in Washington. The outcome will be announced at 1100 GMT on Thursday.

"The April policy meeting is unlikely to rock any boats," said Rabobank economist Jane Foley.

"UK data releases over the past month have confirmed a continued decline in the number of jobless claimants and a simultaneous fall in the inflation rate.

"On balance, there has been little evidence to change our expectation that steady policy is likely to prevail until May 2015 when the BOE is likely to commence a slow upwards adjustment in the bank rate."

The BOE had last year vowed not to start lifting rates until the unemployment rate falls to at least 7.0 percent, under a forward guidance policy launched by governor Mark Carney.

However, the bank tweaked its strategy after the rate fell more sharply than anticipated.

Under amended guidance, the BOE will now seek to absorb all the spare capacity in the economy as it looks to keep inflation close to a government-set target of 2.0 percent, before hiking rates.

The unemployment rate has held steady at 7.2 percent, having fallen to a near five-year low of 7.1 percent late last year.

Britain's 12-month inflation rate meanwhile slowed to 1.7 percent in February, the lowest level for more than four years.

"With inflation falling comfortably below 2.0 percent, we expect the BOE to stay on hold on Thursday, in line with the consensus, which is likely to have a limited market effect," noted Barclays analysts.

The BOE's key lending rate has stood at 0.50 percent since March 2009, when it also launched the radical QE policy to nurse the economy back to health.

"We still think the most likely outcome is that the MPC is persuaded by the weakness of inflation to tread cautiously and holds off raising interest rates until late 2015," said economist Samuel Tombs at consultancy Capital Economics.

The economy expanded by 1.7 percent last year, according to recent downwardly revised data. However, this was still the strongest growth since before the global financial crisis.

GDP grew 0.7 percent in the fourth quarter of 2013 compared with activity in the previous three month period.

Advertise  |   RSS Feed  |   About Us  |   Contact Us
Home  |   Taiwan  |   China  |   Business  |   Asia  |   World  |   Sports  |   Life  |  
Arts & Leisure  |   Health  |   Editorial  |   Commentary Travel  |   Movies  |   Guide Post  |   Terms of Use  |  
  chinapost search