Skip to main content

Bank Of England Holds Interest Rates

Bank Of England Holds Interest Rates - The Bank of England's Monetary Policy Committee Thursday left its key interest rate and the stock of its bond purchases unchanged, and is unlikely to alter its policy for many months to come.

The forecast for the U.K. economy is unusually uncertain. Prices have been rising at a faster rate than the central bank's 2% target in 41 out of the past 50 months, and inflation is forecast to remain above that level throughout next year. That means there is a risk that wage demands will increase, setting off a fresh round of price gains as businesses look to cover their higher costs.

The government is set to cut spending at a time when bank lending remains impaired, the U.K.'s major export markets are still fragile and much spare capacity remains in the economy, and over the medium term that may lead to an inflation rate that is below the central bank's target.

Bank Of England Holds Interest Rates

That lack of clarity about the outlook for prices resulted in a three-way split in the MPC's vote at the October and November meetings, with Adam Posen calling for an expansion in its quantitative-easing policy of buying bonds with freshly created central-bank money, Andrew Sentance for a modest rise in rates, and the majority opting for no change.

With the uncertainty likely to linger, it seems unlikely that either dissenter will win over a significant number of his colleagues any time soon.

However, recent signs that exports are picking up and will provide support to the economic recovery suggest that the BOE's next move is more likely to be a hike in its key interest rate rather than an increase in its bond purchases.

"We continue to doubt that the Bank of England will look to raise interest rates next year, but acknowledge that the prospect of a second round of quantitative easing has clearly receded," said James Knightley, an economist at ING Bank.

Bank Of England Holds Interest Rates

Comments

Popular posts from this blog

Urban Meyer Stepping Down

Urban Meyer Stepping Down - Well, it appears as if it’s deja vu all over again.

Less than 12 months after retiring and then un-retiring, Urban Meyer is apparently stepping down as Florida’s head coach. There’s no word on if he will be stepping back up tomorrow.

Urban Meyer Stepping Down

According to Todd Wright of Sporting News radio, GatorUpdates.com and AOL Fanhouse‘s Brett McMurphy Meyer will announce at a 5 p.m. ET press conference Wednesday that he is resigning/retiring as the Gators’ head coach. There are no further details available at this time, other than GatorUpdates reporting over the weekend that Meyer checked into a hospital the week of the UGA game and has been undergoing tests since.

Obviously, we’ll have more on this story throughout the day and well into the night…

Urban Meyer Stepping Down

Matt Cassel Undergoes Appendectomy

Matt Cassel Undergoes Appendectomy - The mystery of Matt Cassel missing practice Wednesday coupled with the Kansas City Chiefs promoting quarterback Tyler Palko has been solved.

The team has announced that Cassel underwent an appendectomy on Wednesday morning. The Chiefs say they expect Cassel to return to work this week. Returning to work and being ready to perform well in the team’s biggest game of the season on Sunday against San Diego are two different things. ESPN’s Adam Schefter is reporting the Chiefs are viewing Cassel as being questionable to play in the game.

Clearly, this is terrible timing. The Chiefs are 8-4 and would take a major step toward the playoffs with a win over the Chargers. Cassel has played very well for the past two months. If he can’t play, the brittle Brodie Croyle would face the Chiefs in his first action of the season. Croyle last played in Week 13 of the 2009 season.

Matt Cassel Undergoes Appendectomy

Cassel’s availability will come down to whether he…

100-calorie Packs Diet

100-calorie Packs Diet - Did you know recent studies show chronic dieters tend to consume more calories when foods and packages are smaller? Consumer behavior was observed in the study regarding "mini-packs," 100-calorie food packages that are marketed to help people control calorie intake.

The study revealed that one group that over-consumes the mini-packs is chronic dieters - individuals making a conscious effort in trying to manage their weight and food intake.

This shows that the distorted perception of small packages may actually undermine dieters' attempts to limit calories.

Consider this: Consumers perceive the mini-packs to be a generous portion of food - numerous small food morsels in each pack and multiple mini-packs in each box - while on the other hand, consumers perceive the mini-packs to be diet food. For chronic dieters, this perceptual dilemma causes a tendency to overeat, due to their emotion-laden relationship with food.

In a series of focus group studi…