The forecasts echo the Bank of England's gloom, which said last week that GDP would remain below pre-pandemic levels "in the medium term"
The Bank of England raised its main interest rate on Thursday to a fresh 15-year high as it tries to bring down persistently high inflation. The quarter-percentage point increase to 5.25 per cent, which was widely anticipated by economists, was the central bank's 14th hike in a row. There had been fears, certainly among hard-pressed households and businesses, that the bank would repeat its outsized half-point increase from June. But figures last month showing that inflation fell more than anticipated to 7.9 per cent eased the pressure to act as aggressively again. With inflation four times the bank's 2 per cent target, the bank is expected to raise interest rates again over the coming months. Economists said the interest rate outlook will depend largely on how fast inflation comes down. Higher interest rates help dampen inflation but also economic growth by making it more expensive for consumers and businesses to borrow to buy homes, cars or equipment.
The Bank of England is set to raise interest rates Thursday for the 14th time in a row to a fresh 15-year high and keep the door open for further increases in the months to come as it tries to tamp down persistently high inflation. Most economists think the UK central bank will increase its benchmark rate by a quarter of a percentage point, to 5.25 per cent. There had been fears, certainly among hard-pressed households and businesses, that the bank would repeat its outsized half-point increase from June. But figures last month showing that inflation fell more than anticipated to 7.9 per cent eased the pressure to act as aggressively again. With inflation still four times the 2 per cent target, the Bank of England has little choice but to raise the bank rate again and leave the door open to further hikes in upcoming meetings, said Kallum Pickering, senior economist at Berenberg Bank. Though the US Federal Reserve and the European Central Bank raised rates last week, they are thought
Bank Rate peaking at 6% is no longer fully priced, which had been the case on Tuesday
The Bank of England warned Wednesday that UK households are facing mounting financial difficulties from the sharp increase in interest rates but expressed hope that the country's biggest banks are resilient enough to offer more help than they could before the global financial crisis 15 years ago. In its half-yearly financial assessment, the central bank said British households are facing higher debt burdens because of rising interest rates, particularly people whose fixed-rate mortgage deals have come to an end or soon will. However, the Bank of England said several factors should limit the number of people who default on their mortgages. It noted, for example, that UK banks have more capital and are carrying far less debt than they did 15 years ago, allowing them to offer struggling households more financial options. That includes permitting borrowers to vary the terms of their loans. The average household also is carrying less debt than then during the financial crisis, the centra
The Bank of England warned Wednesday that households across the UK are facing increasing problems from the sharp increase in interest rates but found that the country's biggest banks are resilient enough to offer more help than they were able to before the global financial crisis 15 years ago. In its regular health check of the economy, the central bank said British households are facing higher debt burdens as a result of rising interest rates, particularly those whose fixed-rate mortgage deals have come to an end or soon will be. However, it said there are several factors that should limit the number of people who have to default on their mortgages. It noted, for example, that the country's banks have more capital than they did 15 years ago to allow them to offer struggling households more financial options such as allowing borrowers to vary the terms of their loans. The bank lifted its main interest rate by half a percentage point to a 15-year high of 5% last month and warned of .
With another hike in interest rates anticipated by the Federal Reserve and the European Central Bank for July, and some peers on a similar track
Dhingra is one of two members of the BoE's nine-member Monetary Policy Committee (MPC) who have consistently voted against the central bank's interest rate rises since December
The legal framework of India, as implemented by the RBI, provides for an effective equivalent system for the recognition of central counterparties authorised under other regimes of other countries
MPC members Silvana Tenreyro and Swati Dhingra opposed the rate rise - as they have all others this year - saying that much of the impact of past tightening had yet to be felt
Saunders, a member of the Monetary Policy Committee between 2016 and 2022, found that profit margins in the manufacturing and services sectors have slipped below the long-run average
The BoE raised its key interest rate by a quarter of a percentage point to 4.5% on Thursday as expected by a Reuters poll, taking borrowing costs to their highest since 2008
The BoE forecast the economy would grow 0.25% this year - compared with its February prediction of a 0.5% contraction
'Scope for augmenting knowledge on CBDC through mutual learning explored'
Inflation is set to drop sharply from the current 10.4% level in the coming months due to lower energy prices and base effects, as last year's sharp price jumps are not repeated
Another major development in the crypto world during the week was the US Securities and Exchange Commission's 'Wells notice' to crypto exchange Coinbase
Futures imply around a 50% chance of one more quarter-point hike, in contrast to Europe where markets see around 50 bps of further tightening
BoE announces quarter-point rate hike to 4.25%; MPC says it expects inflation to fall faster
Britain's inflation rate rose for the first time in four months in February, surprising an analysts and increasing pressure on the Bank of England to raise interest rates at its meeting on Thursday. The consumer price index jumped to 10.4 per cent in the 12 months through February from 10.1 per cent the previous month, as high energy prices continued to squeeze household budgets, the Office for National Statistics said Wednesday. While economists expect prices to drop rapidly later this year, inflation is more than five times higher than the Bank of England's 2 per cent target. The central bank will weigh the need to control inflation against concerns about the fallout from global banking troubles when it decides whether to raise interest rates on Thursday. The bank has approved 10 consecutive rate increases since December 2021, pushing its key bank rate to 4 per cent. Michael Hewson, chief analyst at CMC Markets UK, said he expects the Bank of England to raise rates by at least a
The rate-increase cycle, which started in May 2022, raising the policy rate from 4 to 6.25 per cent to fight entrenched inflation, is nearing its end