Latest news with #MonetaryPolicy
Yahoo
4 hours ago
- Business
- Yahoo
BOE's Lombardelli on Rate Cut, Labor Market, Inflation
Bank of England Deputy Governor for Monetary Policy Clare Lombardelli discusses the central bank's decision to hold interest rates at 4.25% on Thursday. She also talks about the importance of monitoring geopolitical developments in the Middle East and the impact they could have on oil prices and UK inflation, as well as the UK labor market situation. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Bloomberg
6 hours ago
- Business
- Bloomberg
Julian Harris: No Publicity is Good Publicity for the BOE
The Bank of England did everything it could to avoid ruffling feathers this afternoon — and succeeded. At the time of writing, markets are pricing UK assets at eerily similar levels to where they were sitting prior to the Old Lady's midday decision to keep interest rates at 4.25%. That may seem unsurprising, given the widely-expected hold, but bear in mind that the boat could easily have been rocked by any of the following: the 6-3 vote split, the minutes of the Monetary Policy Committee's meeting, Governor Andrew Bailey's written statement, Bailey's social media clip, Bailey's obligatory letter to the chancellor, or even a brief TV appearance by Deputy Governor Clare Lombardelli. All of which were closely watched by traders hunting for any hint of a dovish or hawkish shift in sentiment.
Reuters
7 hours ago
- Business
- Reuters
UK services inflation is proving sticky, BoE's Lombardelli says
LONDON, June 19 (Reuters) - Bank of England Deputy Governor Clare Lombardelli said on Thursday that British services price inflation - a key measure of domestic price pressures - remained "sticky" despite data showing a slight fall in May. Lombardelli, who was speaking after the central bank kept interest rates at 4.25% in a 6-3 vote split earlier on Thursday, also said the slowdown in Britain's labour market was as expected. "We've seen a rise in a number of elements of inflation. Services inflation is proving to be quite sticky, but we've also seen recent rises in energy prices, other regulated prices," Lombardelli told reporters. "We are seeing some broad weakening in the labour market. I mean, this is in line with what we expected, and actually quite similar to what we set out in our latest Monetary Policy Report in May, but it's important that we consider those changes," she added. Figures published on Wednesday showed British inflation fell to 3.4% in annual terms in May, and service price inflation cooled more than expected to 4.7% from 5.4% in April.
Bloomberg
8 hours ago
- Business
- Bloomberg
BOE's Lombardelli on Rate Cut, Labor Market, Inflation
00:00 We've had the decision from the MPC to keep interest rates unchanged by a margin of 6 to 3, a bit closer than some had expected. Just take us through the thinking there. So we decided to hold rates at 4.25%. Today, we have been able to cut rates four times over the last year. But given the uncertainty facing the economy, we decided to hold at this event. And one of those uncertainties, of course, are the unfolding events in the Middle East and the impact that could have on the oil price. At what point would that become a concern to you? And have there been conversations with the government, for example, on the unfolding crisis and what it could mean? So the events in the Middle East are tragic and they are deeply worrying. As you would expect, we are monitoring carefully those events and the impact that those will have. We've seen oil prices, for example, increase since the attacks. But we are thinking about and focused on the impact for UK inflation. And so we're monitoring and carefully assessing those events. And has there been any conversations with government in terms of thinking about the impacts that could be in the actions that might need to be taken? There's been no specific conversations about the impacts for monetary stability or financial stability. I mean, you've had a lot to consider at this meeting. And one of the things that is front and center in the in the government's quote as well is the changes in the labour market. And when we look at your agents survey, some of them are quite explicit about how this links to policy changes in the government, national Insurance exchange, etc.. To your mind, what's behind the current weakening of the labour market, the slowing of wage growth? How much of it is down to things like National Insurance and National Living Wage? And how does that tell you with your expectations? So we are seeing some poor weakening in the labour market. I mean, this is in line with what we expected and actually quite similar to what we set out in our latest monetary policy report in May. But it is important that we consider those changes. We factor them in. The questions for us all, to what extent that weakening in the labour market will feed through into the prices that people are paying. And there seems to be less pass through in terms of prices, but more of a burden going on to wage growth is like that. There's lots of factors that are changing in the labour market. We are seeing some pass through to prices, we are seeing some pass through to wages. We're also seeing some adjustment of margins and some changes to employment intentions. So you take those together and we're monitoring that carefully. And as you say, our agents around the country talking to a lot of businesses about how they are responding to all the changes that they're seeing in prices across across their businesses. And it's quite an issue. We've got quite weak growth outlook built in to your forecast. And it sounds like more you're saying the underlying pattern is still pretty stagnant. Yeah, we've got growth returning and increasing next year and beyond. So we do see sort of growth increasing, but it is at low, low rates relative to historical standards. Now, six weeks is a long time. A lot can change. But as things stand at the moment, markets are expecting you to cut interest rates come August. Does that seem like a likely scenario? We will decide interest rates in August, in six weeks time. I'm not going to predict what it is we're going to do. We have said that we expect interest rates to be on a gradually downward path in general. But of course we need to be careful and think about all of the factors playing in. I mean, inflation is still too high and that is painful for people. And services, inflation particular points for them. Yet we've seen a rise in the number of elements of inflation. Actually, you're right, services inflation is proving to be quite sticky. But we've also seen recent rises in energy prices, other regulated prices like transport, like phones and of course food prices have risen as well. And all of that, taken together, is obviously difficult for people.
Economy ME
9 hours ago
- Business
- Economy ME
Bank of England maintains interest rates at 4.25 percent citing a 'highly unpredictable world'
The Bank of England (BoE) maintained the U.K. interest rates at 4.25 percent on Thursday, citing a 'highly unpredictable world' as the reason for this decision. The Bank's nine-member Monetary Policy Committee (MPC) voted with a majority of six to three in favor of keeping rates unchanged. Three committee members—Swati Dhingra, Dave Ramsden, and Alan Taylor—voted to lower the rate by 0.25 percentage points to 4 percent. Despite Thursday's decision, the Bank emphasized that interest rates are on a 'downward path.' The Monetary Policy Committee voted by a majority of 6-3 to keep interest rates at 4.25% Find out more: — Bank of England (@bankofengland) June 19, 2025 Andrew Bailey, the governor of the Bank of England, stated: 'Interest rates remain on a gradual downward path, although we've left them on hold today. The world is highly unpredictable. In the U.K. 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.' The last time the Bank cut interest rates was in May, when they were reduced by 0.25 percent to the current level of 4.25 percent. U.K. consumer prices increased by 3.4 percent in May on an annualized basis, representing a rise of 0.8 percentage points compared to March. Economists have chosen to overlook the reading from April due to a correction in the Office for National Statistics data. Read more: Bank of England slashes interest rates to 4.25 percent amid global trade uncertainty Norway's first rate cut since pandemic In a similar move, Norway's central bank has reduced interest rates by 25 basis points to 4.25 percent, marking the first cut since the onset of the Covid-19 pandemic. Norges Bank had indicated in March that it anticipated lowering its key sight deposit rate in June and has now followed through on that plan. 'Inflation has declined since the monetary policy meeting in March, and the inflation outlook for the coming year indicates lower inflation than previously expected,' stated Ida Wolden Bache, the central bank's governor. 'A cautious normalization of the policy rate will pave the way for inflation to return to target without restricting the economy more than necessary.' The interest rate cuts were largely anticipated by economists.
