Fri. Nov 27th, 2020

Bank of England split over interest rates again – business live

Rolling coverage of the latest economic and financial news

1.15pm GMT

Hinesh Patel, portfolio manager at Quilter Investors, says the BoE is in ‘wait-and-see’ mode, after leaving interest rate on hold.

This familiar holding pattern is likely to continue for some time as we await detail on what the future relationship with the European Union looks like. However, it is clear from the Bank that it is not just Brexit, or the hedge funds, that Mark Carney and co seem to be concerned about.

They have specifically referenced the need to act on interest rates should global growth fail to stabilise and ease to help boost UK GDP and inflation.

“While today’s interest rate decision was widely anticipated, a myriad of factors will be crucial in determining the future path of UK monetary policy. When the new BoE governor takes over in January 2020, he or she will need to consider the risk of falling demand from the UK’s most significant trading partners, the impact of the US-China trade war on the wider global economy and, barring any surprises, the outcome of the long-drawn Brexit process.” –

“After last week’s election result, the short-term clarity we have on Brexit could give a lift to economic sentiment, especially for businesses. A modest fiscal easing in the forthcoming budget could also push things along a little.

“Overall, though, as attention turns to the December 2020 end of transition deadline, the mood will likely remain subdued and growth weak. We expect that the committee will move further towards a rate cut in 2020 and a quarter point easing in May.”

12.40pm GMT

Related: Bank of England keeps interest rates on hold despite weak economy

Continue reading…Rolling coverage of the latest economic and financial newsLatest: Bank of England’s interest rate decisionRiksbank hikes interest rates to… zeroBoE press conference audio feed hackedSome City traders got crucial head start on Carney commentsTry the Guardian Business Christmas Quiz! 1.15pm GMTHinesh Patel, portfolio manager at Quilter Investors, says the BoE is in ‘wait-and-see’ mode, after leaving interest rate on hold.This familiar holding pattern is likely to continue for some time as we await detail on what the future relationship with the European Union looks like. However, it is clear from the Bank that it is not just Brexit, or the hedge funds, that Mark Carney and co seem to be concerned about.They have specifically referenced the need to act on interest rates should global growth fail to stabilise and ease to help boost UK GDP and inflation.“While today’s interest rate decision was widely anticipated, a myriad of factors will be crucial in determining the future path of UK monetary policy. When the new BoE governor takes over in January 2020, he or she will need to consider the risk of falling demand from the UK’s most significant trading partners, the impact of the US-China trade war on the wider global economy and, barring any surprises, the outcome of the long-drawn Brexit process.” – “After last week’s election result, the short-term clarity we have on Brexit could give a lift to economic sentiment, especially for businesses. A modest fiscal easing in the forthcoming budget could also push things along a little.“Overall, though, as attention turns to the December 2020 end of transition deadline, the mood will likely remain subdued and growth weak. We expect that the committee will move further towards a rate cut in 2020 and a quarter point easing in May.” 12.40pm GMT Related: Bank of England keeps interest rates on hold despite weak economy Continue reading…

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