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Sancho Panza

Bank Could Cut Rates Amid Uk Growth Fears

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Sky News 4/2/16

'The Bank of England has cut its forecasts for UK economic growth to the weakest level in three years and said that it stands ready to cut interest rates if there is another slump.

In a sign of growing concern about the recovery, the Bank voted unanimously to leave the official borrowing rate on hold at 0.5%, with one Monetary Policy Committee member saying he was no longer in favour of a hike.

It comes amid growing speculation that the next move in borrowing costs could be down rather than up.

In its quarterly Inflation Report, the Bank cut its forecast for economic growth this year from 2.5% to 2.2% and reduced its 2017 projection from 2.7% to 2.4%. It also cut its forecast for CPI inflation from 1.5% this year to 1.2%.

The report will reinforce suspicions that, having signalled only months ago that a rate hike was imminent, the Governor, Mark Carney, is likely to sit on his hands for at least another year.

Mr Carney said: "We'll do the right thing at the right time on rates." He added that it had been "an easy decision" not to raise rates recently, reiterating his view that "now is not the time" for a hike.

The governor hailed the strength of the domestic economy amid record employment and a more robust financial system but warned of the dangers from slowing world growth and recent turmoil in stock markets.

Mr Carney said: "The UK cannot help but be affected by an unforgiving global environment and sustained financial market turbulence."

:: Governor's Forecasts Prove Wide Of The Mark

Based on investors' expectations, as reflected in money markets, the first increase in borrowing costs is now not expected until August 2018 - after Mr Carney’s initial five-year term comes to an end.

Markets are also pricing in a 30% probability that the next move in rates is down rather than up.

Although the minutes to the MPC decision today stated that "it was more likely than not that Bank Rate will need to increase over the forecast period", in a letter to the Chancellor explaining why inflation remains well below the 2% target, Mr Carney said: "The Committee could also decide to extend the Asset Purchase Facility or to cut Bank Rate further towards zero from its current level of 0.5%."

UK interest rates are already at the lowest level since the Bank was founded in 1692, but in recent years other central banks, including the European Central Bank and Bank of Japan have decided not only to cut borrowing costs further but to drop them into negative territory.

Most economists still expect the next move in UK interest rates to be up rather than down, though it may not arrive for some years.'

Read the reassuring story of how our bankers arrived at the conclusion of 2% inflation representing the ultimate in price stability.

New York Times 14/12/14

'Sometimes, decisions that shape the world’s economic future are made with great pomp and gain widespread attention. Other times, they are made through a quick, unanimous vote by members of the New Zealand Parliament who were eager to get home for Christmas.'

Edited by Sancho Panza

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UK interest rates are already at the lowest level since the Bank was founded in 1692,

in at least 5000 years.

low%20interest%20rates%20chart.jpg

Since records began.

Edited by billybong

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their is a war going on, the government vs the people, only when blair has his way and the uk army joins the eu army and so forth the un army will the war be over and the parasitical mafia can quell the populations of the world.

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So keep interest rates low to allow people to borrow lots of money for a future in which there's no growth to allow them to afford to pay the loan off

All makes perfect sense :rolleyes:

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House price inflation is the only thing stopping disinflation becoming deflation.

It's the one thing that is causing deflation....No one has any money left after their housing costs !!!!

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'The Bank of England has cut its forecasts for UK economic growth to the weakest level in three years and said that it stands ready to cut interest rates if there is another slump.

To be fair the 2015 general election was run on false pretences regarding the prospects for the UK economy - but there's nothing new in that of course.

Edited by billybong

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http://www.heraldscotland.com/business/13412982.Bank_of_England_s_Mark_Carney_paid_almost___880_000/

He's on £880,000.

To be fair,they could have paid me £50,000 per annum to sit on my hands and do nothing,but that'd be deflationary.

Chump change.

It's like an entertainers wage, a front man, an actor, a compere. If he actually did useful stuff he'd be on £18k basic, OTE £35-£40k.

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http://www.heraldscotland.com/business/13412982.Bank_of_England_s_Mark_Carney_paid_almost___880_000/

He's on £880,000.

To be fair,they could have paid me £50,000 per annum to sit on my hands and do nothing,but that'd be deflationary.

Chump change.

Yes but in the states that old girl with the squeaky voice has only gone and put rates up by a full 0.25% and everybody in the world has nearly died. They might want him there next.

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Turning Japanese? Where is KB?

busy being financially repressed.

free market capitalists, they just love lending money at negative rates to governments they dont want to exist.

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I really can't understand why we have an MPC?

Pretty obvious they don't actually do anything or control anything of note. Absolute puppets to their govt and rich finance/merchant masters.

Good theatrics for the media every month. Nowt else.

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Good theatrics for the media every month.

Basically this. It's critical that the people believe in what is going on and never see what is behind the curtain.

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