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Times
13 hours ago
- Business
- Times
Bank of England holds steady as divisions emerge over rates
The Bank of England missed the party on Thursday when it announced that interest rates would hold steady at 4.25 per cent. On a day littered with monetary policy announcements across Europe, it was the only major central bank to sit tight. Switzerland's central bank cut rates by a quarter point. Sweden's did the same, as did Norway's. In the UK, the monetary policy committee was not for turning and stuck to the script: markets expected rates to be held and the Bank of England duly delivered. However, that the committee voted 6-3 in favour of leaving rates unchanged did somewhat upset the apple cart. Analysts projected a 7-2 vote split. Dave Ramsden, a deputy governor, broke from the centre ground on the MPC and voted alongside Swati Dhingra and Alan Taylor — external committee members who have repeatedly voted for frequent and larger cuts — for a 0.25 percentage point reduction.
Zawya
21 hours ago
- Business
- Zawya
Bank of England keeps rates steady, sees further loosening as jobs market weakens
The Bank of England held interest rates at 4.25% as expected on Thursday but said it was focused on risks from a weaker labour market and higher energy prices as conflict in the Middle East escalates. Noting the elevated global uncertainty and persistent inflation, the Monetary Policy Committee voted 6-3 to keep rates on hold, with Deputy Governor Dave Ramsden joining Swati Dhingra and Alan Taylor to vote for a quarter-point reduction. A Reuters poll of economists had forecast an 7-2 vote to keep rates on hold after the central bank cut borrowing costs last month for the fourth time since August 2024. "Interest rates remain on a gradual downward path," BoE Governor Andrew Bailey said, although policymakers added that interest rates were not on a pre-set path. "The world is highly unpredictable. In the UK we are seeing signs of softening in the labour market. We will be looking carefully at the extent to which those signs feed through to consumer price inflation," he added. The central bank said rising tensions in the Middle East as it held its meeting over the past week had not been key to June's decision to hold rates but would be closely monitored going forward. "Energy prices had risen owing to an escalation of the conflict in the Middle East. The committee would remain vigilant about these developments and their potential impact on the UK economy," the BoE said. Nearly all 60 economists polled by Reuters before the BoE's June meeting had predicted it would keep Bank Rate on hold at 4.25% with the next cut likely in August with a further reduction in the final three months of this year. Before Thursday's rate decision, investors were pricing in around two more quarter-point rate cuts by the BoE to 3.75% by December 2025. The central bank kept its guidance saying it would take a "gradual and careful" approach to further rate cuts. But Bank staff analysis struck a less pessimistic tone about the potential impacts of U.S. President Donald Trump's tariffs on the global economy, saying it might be less severe than thought in May. Trade uncertainty would still continue to have an impact on the UK economy, the central bank added. The BoE left its forecast for inflation broadly unchanged for the second half of this year, seeing a peak rate of 3.7% in September and an average of just under 3.5% for the rest of the year. The economy is now expected to grow around 0.25% in the second quarter of this year, slightly stronger than in its May forecast, though it said the underlying pace was weak. Since the middle of last year the BoE has cut interest rates by 1 percentage point, the same as the U.S. Federal Reserve - which on Wednesday held interest rates at the 4.25%-4.50% range - but only half as much as the European Central Bank, which has had less persistent inflation. Markets see just under half a percentage point more easing by the Fed this year and a further quarter-point cut by the ECB. The Fed on Wednesday cut its economic growth forecasts for 2025, raised its inflation projection and said the uncertainty hanging over the economy had diminished but remained elevated. Earlier on Thursday, the Swiss National Bank cut rates by 25 basis points to zero as inflation inflationary pressures decreased and it focused the risk of trade wars for inflation and the global economy. (Reporting by Suban Abdulla and David Milliken) Keywords: BRITAIN BOE/
Time of India
a day ago
- Business
- Time of India
Bank of England keeps rates steady, sees further loosening as jobs market weakens
The Bank of England held interest rates at 4.25% as expected on Thursday but said it was focused on risks from a weaker labour market and higher energy prices as conflict in the Middle East escalates. Noting the elevated global uncertainty and persistent inflation, the Monetary Policy Committee voted 6-3 to keep rates on hold, with Deputy Governor Dave Ramsden joining Swati Dhingra and Alan Taylor to vote for a quarter-point reduction. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo A Reuters poll of economists had forecast an 7-2 vote to keep rates on hold after the central bank cut borrowing costs last month for the fourth time since August 2024. "Interest rates remain on a gradual downward path," BoE Governor Andrew Bailey said, although policymakers added that interest rates were not on a pre-set path. "The world is highly unpredictable. In the UK we are seeing signs of softening in the labour market. We will be looking carefully at the extent to which those signs feed through to consumer price inflation," he added. Live Events The central bank said rising tensions in the Middle East as it held its meeting over the past week had not been key to June's decision to hold rates but would be closely monitored going forward. "Energy prices had risen owing to an escalation of the conflict in the Middle East. The committee would remain vigilant about these developments and their potential impact on the UK economy," the BoE said. Nearly all 60 economists polled by Reuters before the BoE's June meeting had predicted it would keep Bank Rate on hold at 4.25% with the next cut likely in August with a further reduction in the final three months of this year. Before Thursday's rate decision, investors were pricing in around two more quarter-point rate cuts by the BoE to 3.75% by December 2025. The central bank kept its guidance saying it would take a "gradual and careful" approach to further rate cuts. But Bank staff analysis struck a less pessimistic tone about the potential impacts of U.S. President Donald Trump's tariffs on the global economy, saying it might be less severe than thought in May. Trade uncertainty would still continue to have an impact on the UK economy, the central bank added. The BoE left its forecast for inflation broadly unchanged for the second half of this year, seeing a peak rate of 3.7% in September and an average of just under 3.5% for the rest of the year. The economy is now expected to grow around 0.25% in the second quarter of this year, slightly stronger than in its May forecast, though it said the underlying pace was weak. Since the middle of last year the BoE has cut interest rates by 1 percentage point, the same as the U.S. Federal Reserve - which on Wednesday held interest rates at the 4.25%-4.50% range - but only half as much as the European Central Bank, which has had less persistent inflation. Markets see just under half a percentage point more easing by the Fed this year and a further quarter-point cut by the ECB. The Fed on Wednesday cut its economic growth forecasts for 2025, raised its inflation projection and said the uncertainty hanging over the economy had diminished but remained elevated. Earlier on Thursday, the Swiss National Bank cut rates by 25 basis points to zero as inflation inflationary pressures decreased and it focused the risk of trade wars for inflation and the global economy.
Reuters
a day ago
- Business
- Reuters
Bank of England keeps rates steady, sees further loosening as jobs market weakens
By Suban Abdulla and David Milliken LONDON, June 19 (Reuters) - The Bank of England held interest rates at 4.25% as expected on Thursday but said it was focused on risks from a weaker labour market and higher energy prices as conflict in the Middle East escalates. Noting the elevated global uncertainty and persistent inflation, the Monetary Policy Committee voted 6-3 to keep rates on hold, with Deputy Governor Dave Ramsden joining Swati Dhingra and Alan Taylor to vote for a quarter-point reduction. A Reuters poll of economists had forecast an 7-2 vote to keep rates on hold after the central bank cut borrowing costs last month for the fourth time since August 2024. "Interest rates remain on a gradual downward path," BoE Governor Andrew Bailey said, although policymakers added that interest rates were not on a pre-set path. "The world is highly unpredictable. In the UK we are seeing signs of softening in the labour market. We will be looking carefully at the extent to which those signs feed through to consumer price inflation," he added. The central bank said rising tensions in the Middle East as it held its meeting over the past week had not been key to June's decision to hold rates but would be closely monitored going forward. "Energy prices had risen owing to an escalation of the conflict in the Middle East. The committee would remain vigilant about these developments and their potential impact on the UK economy," the BoE said. Nearly all 60 economists polled by Reuters before the BoE's June meeting had predicted it would keep Bank Rate on hold at 4.25% with the next cut likely in August with a further reduction in the final three months of this year. Before Thursday's rate decision, investors were pricing in around two more quarter-point rate cuts by the BoE to 3.75% by December 2025. The central bank kept its guidance saying it would take a "gradual and careful" approach to further rate cuts. But Bank staff analysis struck a less pessimistic tone about the potential impacts of U.S. President Donald Trump's tariffs on the global economy, saying it might be less severe than thought in May. Trade uncertainty would still continue to have an impact on the UK economy, the central bank added. The BoE left its forecast for inflation broadly unchanged for the second half of this year, seeing a peak rate of 3.7% in September and an average of just under 3.5% for the rest of the year. The economy is now expected to grow around 0.25% in the second quarter of this year, slightly stronger than in its May forecast, though it said the underlying pace was weak. Since the middle of last year the BoE has cut interest rates by 1 percentage point, the same as the U.S. Federal Reserve - which on Wednesday held interest rates at the 4.25%-4.50% range - but only half as much as the European Central Bank, which has had less persistent inflation. Markets see just under half a percentage point more easing by the Fed this year and a further quarter-point cut by the ECB. The Fed on Wednesday cut its economic growth forecasts for 2025, raised its inflation projection and said the uncertainty hanging over the economy had diminished but remained elevated. Earlier on Thursday, the Swiss National Bank cut rates by 25 basis points to zero as inflation inflationary pressures decreased and it focused the risk of trade wars for inflation and the global economy. (Reporting by Suban Abdulla and David Milliken) (( opens new tab)) Keywords: BRITAIN BOE/
Bloomberg
a day ago
- Business
- Bloomberg
Bank of England Holds Rates Steady at 4.25% in Dovish 6-3 Vote
The Bank of England held interest rates at 4.25% in a more divided vote than expected as policymakers reacted to signs of softening in the labor market and weak growth against a backdrop of mounting geopolitical tensions. In a decision that left rates on course for a potential quarter-point cut in August, six of the BOE's nine Monetary Policy Committee members voted to leave rates unchanged while three - externals Swati Dhingra and Alan Taylor, as well as Deputy Governor Dave Ramsden — preferred an immediate quarter-point reduction.
