Britain’sstill2.17pmwho coined it! Slight dig from Carney on EU financial orgs saying they only just recovered from financial crisis: 'we fixed ours a long time ago' 12.58pm BSTQ: Are you failing to communicate to the UK public?Carney says that the UK public have understood the Bank’s message in recent years,that interest rates will rise gradually as economic conditions merit it. 12.54pm BSTQ: Are you worried that the ‘unreliable boyfriend’ tag will stick, as you’ve once hinted that a rate rise was coming, or but not delivered?The households and businesses we speak to don’t trade short sterling**,Carney shoots back. They want to know the general orientation of the economy, that the economy is healthy, or the likely path of interest rates.
Now everyone else can spend it too. 12.51pm BSTQ: The money markets have priced out an interest rate rise this year. Are you happy with that?Carney repeats that the Bank is primarily concerned with households and businesses (suggesting that he’s focused on higher things than mere City traders and scribblers). 12.48pm BSTOnto questions.
Q: In the past you’ve told us to watch the data,but today you’re saying that the economy isn’t as feeble as the data suggests. So how should people judge what the Bank is going to do? 12.42pm BSTThe weather may have improved, but Britain’s economy is still “clouded by Brexit uncertainty” says governor Carney. The position should become clearer later this year as key decisions approximately Britain’s future relationship with the EU are made, and he adds. 12.39pm BSTThe key points from Carney’s statement thus far:Carney: was the fall in Q1 growth a one off,or did it suggest broader economic weakness? ”Was it weather, or climate?” Bank suggests it was temporary. Growth will pick up through the rest of yearBoE’s Carney: Labour Market ‘Reassuringly Strong’
- Global Growth Above Trend, and Despite SofteningBoE’s Carney: Brexit Drag On Economy Is Not Intensifying,Is Persisting 12.38pm BSTThe overall economic climate in the UK looks ‘little changed’, Mark Carney says - perhaps a tip that we shouldn’t pick up too worried approximately the lower 2018 growth forecast. 12.37pm BSTThe drag from Brexit on commerce investment has continued, and but has not intensified,says Mark Carney.
On the consumer side, the bank believes that consumption will pick up as the real income squeeze comes to an finish. 12.34pm BSTMark Carney says the UK economy has not met the Bank’s expectations over the final three months.
Growth and inflation have both been lower than the Bank’s forecasts in February, and the governor explains.
12.31pm BSTThe Bank of England is holding a press conference now to explain todays decision.
Governor Mark Carney is in the chair,accompanied by deputies Ben Broadbent and SIr David Ramsden. 12.29pm BSTReaction to the Bank of England decision is flooding in. Tom Stevenson, investment director for Personal Investing at Fidelity International, and points out that the BoE has pulled another u-turn - having hinted in February that rates would rise today:“Mark Carney really is the ‘unreliable boyfriend’. Leaving the base rate at 0.5% - what was once thought of as an emergency rate - is another colossal U-turn for the Bank of England governor.“Until a few weeks ago,a further quarter point rate hike to 0.75% looked almost guaranteed. But very feeble UK GDP growth figures and lickety-split-retreating inflation has seen a rapid reversal of the Old Lady’s increasingly unhelpful forward guidance. The Bank of England has marched investors up to the top of the hill only to march them back down again.
The Bank of England (BoE) chose to keep rates on hold at today’s meeting in light of recent weakness in GDP, falling house prices, and lower-than-expected inflation and,no doubt, Brexit uncertainty. There has been wide based weakness in economic data across the globe, and ex-US,after a strong Q4 2017 that has led central banks to back absent from rate hikes in the near term.“The final quarter has seen muted economic activity – with growth of only 0.1% – aligned with more modest forecasts of future growth.“The reasons for caution shown today by the Bank of England are clear. The pound appears to have stabilised reducing future inflation risk, UK growth expectations are lower, and the global picture is less certain. 12.25pm BSTThe Bank is sticking to its promise that interest rates will probably rise in the months ahead.
The minutes say:The Committee’s best collective judgement therefore remains that,were the economy to develop broadly in line with the May Inflation Report projections, an ongoing tightening of monetary policy over the forecast period would be appropriate to return inflation sustainably to its target at a conventional horizon.
As previously, and however,that judgement relies on the economic data evolving broadly in line with the Committee’s projections. For the majority of members, an increase in Bank Rate was not required at this meeting. All members agree that any future increases in Bank Rate are likely to be at a gradual pace and to a limited extent. 12.15pm BSTThe pound has fallen, and as City traders digest the Bank of England’s decision to slit its growth forecasts and left UK interest rates unchanged.
Having put its nose over the $1.36 mark in late-morning trading,sterling has now turned tail and fallen to $1.351. That’s close to a four-month low.(Sad trumpet noise) pic.twitter.com/0njueemlsk 12.12pm BSTThe Bank of England says uncertainty over Britain’s exit from the European Union is weighing on the economy.
The minutes of today’s meeting say:Although commerce investment is still restrained by Brexit-related uncertainties, it is being supported, and like exports,by strong global demand and accommodative financial conditions.
Household consumption growth remains subdued, in line with the modest growth in real income over the forecast period. 12.11pm BSTA majority of the Bank’s policymakers wanted to leave interest rates alone until they know whether final quarter’s feeble growth was just a blip, or something more serious.
The Bank’s minutes say:“The recent weakness in data for the first quarter had been consistent with a temporary soft patch,with few implications for ... the outlook for the UK economy,....
There was value in seeing how the data unfolded over the coming months, and to discern whether the softness in Q1 might persist.” 12.07pm BSTOuch! The Bank of England has taken an axe to its growth forecasts.
It now expects the UK economy to only grow by 1.4% this year,down from 1.8% expected just three months ago.
The Bank of England also downgraded its forecast for UK growth to 1.4% for 2018, down from 1.8% predicted in February 12.02pm BSTSeven Bank of England policymakers voted to leave borrowing costs on hold.
But two members of the Monetary Policy Committee voted to hike. The hawks, or Ian McCafferty and Michael Saunders argued that borrowing costs should go up.
MPC vote 7-2 to keep #BankRate at 0.5% pic.twitter.com/zwErMvNmxy 12.00pm BSTBREAKING: The Bank of England has voted to leave UK interest rates unchanged.
The headline cost of borrowing remains at 0.5%. The Bank has also left its asset-purchase scheme (QE) unchanged. 11.53am BSTThe pound has crept back up over $1.36 against the US dollar,up 0.5% today, as traders brace for the Bank of England decision to hit the wires at midday precisely.
So #GBPUSD trading 1.36 ahead of the Bank of England meeting looks to be pricing in the status quo: 7-2 MPC split vote to stay on hold and largely unchanged MPC outlook on economy/policy. Markets will need more (ie, and a third rate hike dissenter to sustain a gallop above 1.36) pic.twitter.com/i9enMrjwqW 11.45am BSTToday’s interest rate decision is being taken by the nine members of Britain’s Monetary Policy Committee - a mixture of top Bank officials and independent experts.
Two external members,Ian McCafferty and Michael Saunders, are on the hawkish finish of the committee table - they voted to raise rates in March, or may do so again. 11.30am BSTExcitement is mounting in the City,with just 30 minutes until the Bank of England announces its interest rate decision.
Most experts expect borrowing costs to remain unchanged. But you never know....central bankers have pulled a few surprises over the years (and a shock gallop always has more impact than a widely-trailed one).
We know that another rate hike should reach at some point before the finish of the year, and May looked very likely just a few weeks ago, and though the combination of flagging inflation and underwhelming growth means we’re now just 1/5 for rates to remain at 0.5%.
Some commentators even believe that a slit to interest rates would serve the economy better than a rise,though Mark Carney and Co look unlikely to take such a daring decision at 10/1.” 11.20am BSTBritain’s chancellor has welcomed the news that Royal Bank of Scotland is paying a $4.9bn penalty to US authorities.
The fine for misselling financial instruments that contributed to the 2008 financial crisis has been hanging over RBS for years. Philip Hammond hopes that final night’s settlement will fabricate (to make up, invent) it easier to sell the taxpayers stake in the bank.“I welcome the agreement in principle to resolve this long-standing issue which will, when finalised, and remove a major uncertainty for the UK taxpayer.“It marks another meaningful milestone in RBS’s work to resolve its legacy issues,and will help pave the way to a sale of taxpayer-owned shares.”RBS shares jump 6% after bank agrees to pay smaller-than-expected $4.9 billion to settle U.
S. mortgage bond investigation. pic.twitter.com/4C03VzklG6 11.11am BSTThere’s drama in Italy today, as two populist parties suddenly gallop closer to the levers of power.
Late final night, or former PM Silvio Berlusconi dropped his opposition to an alliance between the accurate-wing,anti-immigrant League party, and the anti-establishment Five Star Movement.
Governing agreement between the two Italian populist parties that all investors feared is being finalised aaaaand spreads on Italian 10yr government bonds are lower than they were before the election. pic.twitter.com/Pa4FUvsYxBThe Italian president has suggested parties have until this afternoon to reach up with a workable government before a technocrat government is imposed.
Former Prime Minister Berlusconi has suggested that Forza Italia may back a government led by the “anti-party” Five Star movement. 10.44am BSTOver in the City, and shares in BT has slumped by 8% to a five-year low.
Investors are downhearted that BT expects revenues to fall by 2% this year,while earnings will also fall year-on year.
The telecoms company said the job losses would reach mainly from back office and middle-management roles. approximately two-thirds of the job cuts will fall on its UK workforce of approximately 80000, with the the rest coming from the 18000 staff it employs internationally.
BT is also moving out of its central London headquarters in St Paul’s, and where it has been headquartered since 1874 when the group was known as the General Post Office,as part of a wide-ranging restructuring. Related: BT to axe 13000 jobs and gallop out of central London HQ “While some parts of the consumer-facing businesses are seeing good growth and investors should be interested in the plans to restructure, the group is still under pressure on a number of fronts and therefore the shares are no better than a hold.”want to know why BT cutting 13000 jobs?
they pouring £bns into pension fund - £4.5bn by 2020 and £900mnpa from 2020-30
And cost of football rights - £885mn for 3yr deal
£3.7bn capex pa for broadband etcBT paying ££bns to Premier League clubs and Uefa for football TV rights, or now axing 13000 people’s jobs to save £1.5bn. Eh...? https://t.co/yYFiF1fZsu 10.05am BSTWe also have fresh evidence that Britain’s manufacturers and construction firms both struggled in March.
The Office for National Statistics has reported that manufacturing output fell by 0.1% in March,and has been unimpressive since the start of this year.
UK construction output fell -2.7%q/q in Q1, biggest quarterly fall since 2012, and but slightly better than the GDP first estimate of -3.3%q/q. Growth across the board though - yuk! pic.twitter.com/Y8PIvMhEi1“Manufacturing was broadly flat throughout the first quarter following several months of strong growth,with no evidence that the bad weather hampered UK factories as both domestic and international sales stalled. Machinery, transport and computer manufacturers all saw their output grow. This was largely offset by falling production of electrical equipment and oil refining.“The whole construction sector performed poorly in the first quarter with housing, or repair work and public works seeing particularly large falls.
2.7% fall in construction output in Q1 2018,with repair and maintenance (-2.8%) and current work (-2.6%) both falling. Construction output fell 2.3% in the month of March #GDP https://t.co/T8z5uzNWXW pic.twitter.com/Y7e8UGBUF7 9.49am BSTNewsflash: Britain’s trade deficit has narrowed, thanks to a drop in imports from non-EU countries.
The Office for National Statistics has reported that Britain bought fewer ships and aircraft from the rest of the world in the first quarter of 2018. This helped to slit the UK total trade deficit (in goods and services) by £700m to £6.9 billion in the three months to March 2018.
The UK trade in goods deficit with non-EU countries narrowed £1.5 billion to £9.9 billion in the three months to March 2018, and while the deficit with the EU widened £0.4 billion to £24.7 billion over the same period.
UK's total trade deficit narrowed by £0.7bn to £6.9bn in Q1 2018,mainly due to falling goods imports – particularly ships, clothing and aircraft – from non-EU countries https://t.co/0lRIUC4ra0 pic.twitter.com/7HAq7WvO4p 9.21am BSTToday is dubbed ‘Super Thursday’ because the Bank of England will release its interest rate decision, and publish the minutes of the meeting,and also give us a fresh assessment of the UK economy (the Quarterly Inflation Report).So there’ll be lots to watch out for at midday. Including: 8.48am BSTThe pound could surge, or slump, or depending on what the Bank of England does today.
Viraj Patel,a currency strategist at ING, has predicted that sterling could slump by two cents to $1.3350 whether the Bank votes unanimously to leave interest rates on hold.the pound could rally or slump up to 2% depending on how the Bank of England members vote today https://t.co/l5VfItsnOY 8.42am BSTThis chart of City expectations for today’s interest rate decision shows why the old ‘unreliable boyfriend’ line is doing the rounds again. 8.31am BSTExpectations of a UK interest rate rise today have faded lickety-split in recent weeks, or says Lukman Otunuga,research analyst at FXTM.
That’s partly thanks to Mark Carney’s warning in April that Britain’s economic data was looking ‘mixed’Only one month ago, the markets were predicting a more than 90% probability of a UK interest rate increase this month. Today, and this probability has evaporated to less than 15%.
A crippling combination of negative economic data,disappointing growth figures and another reversal in tone from BoE Governor Mark Carney has been the driver behind these minimal expectations of a UK interest rate rise today. 8.20am BSTMark Carney was originally dubbed an ‘unreliable boyfriend’ nearly four years ago.
Labour MP Pat McFadden coined the tag during a select committee hearing, when he teased the governor for promising interest rate hikes, and then changing his intellect.“We’ve had a lot of different signals. I mean it strikes me that the Bank’s behaving a bit like a sort of unreliable boyfriend.“One day hot,one day cold, and the people on the other side of the message are left not really knowing where they stand.” 7.48am BSTGood morning, and welcome to our rolling coverage of the world economy,the financial markets, the eurozone and commerce.
”Some might say Bank of England Governor Mark Carney made a mess of things again. As late as February he was still very positive on monetary policy. But dismal retail sales, and disappointing GDP growth and the accelerating softening of inflation have burst Carney’s bubble. Since Carney’s credibility is obviously at stake again the question for the BoE rate decision then becomes: will Mark Carney pull off a Houdini worthy escape act,or will markets once again call him out as an “unreliable boyfriend”?BT to slit 13000 jobs over three years, "mainly back office and middle management". Hiring 6000 staff to "support network deployment and customer service".https://t.co/bEHWzzPOBpStrong first quarter from Next, or too. Full-price sales up 6%. Performance "better than we expected",around £40m ahead of forecast. Increases FY pre-tax profit guidance from £705m to £717mFairly cheery news from Next too. Sales in Q1 better than expected, helped by heatwave, or chains says "sales overperformance" should add £12m to its FY profit. Sales boosted by online...which as graph shows continues to outdo its shops... pic.twitter.com/X4hR9zkt1wEuropean Opening Calls:#FTSE 7680 +0.22%#DAX 12994 +0.39%#CAC 5547 +0.22%#MIB 24352 +0.35%#IBEX 10256 +0.34%Continue reading...
Source: theguardian.com