Bank of England keeps rates on hold as it sees signs of post-election pickup
Skip to main content
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Splash
  • Features
  • Videos
  • Long Read
  • Games
  • Epaper
  • More
    • COVID-19
    • Bangladesh
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Subscribe
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
The Business Standard
MONDAY, MAY 23, 2022
MONDAY, MAY 23, 2022
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Splash
  • Features
  • Videos
  • Long Read
  • Games
  • Epaper
  • More
    • COVID-19
    • Bangladesh
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Subscribe
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
Bank of England keeps rates on hold as it sees signs of post-election pickup

Global Economy

Reuters
30 January, 2020, 06:15 pm
Last modified: 30 January, 2020, 06:20 pm

Related News

  • EU ambassador to UK says bloc won't change mandate in Brexit talks
  • UK cost of living crisis to peak later this year, BoE to press on with rate rises
  • Britain eyes green trade to end world's dependence on Russian energy
  • Britain to set out new steps to tackle post-Brexit N Ireland trade
  • UK unemployment falls to lowest since 1974

Bank of England keeps rates on hold as it sees signs of post-election pickup

Lower immigration and weaker business investment would also weigh on the economy

Reuters
30 January, 2020, 06:15 pm
Last modified: 30 January, 2020, 06:20 pm
FILE PHOTO: Commuters cycle past the Bank of England (C) in the City of London, August 7 2013. REUTERS/Toby Melville/File Photo
FILE PHOTO: Commuters cycle past the Bank of England (C) in the City of London, August 7 2013. REUTERS/Toby Melville/File Photo

The Bank of England kept interest rates steady on Thursday, saying signs that Britain's economy had picked up since December's election, and of a stabler global economy, meant more stimulus was not needed now.

Financial markets had seen a 50 percent chance of a cut but the Monetary Policy Committee split once again 7-2 in favor of keeping Bank Rate at 0.75 percent with external members Michael Saunders and Jonathan Haskel again voting to lower rates.

Economists polled by Reuters had on average expected one more policymaker to vote for a cut.

The central bank kept the door open for a move after Governor Mark Carney hands over to his successor, Andrew Bailey, in March.

"Policy may need to reinforce the expected recovery in UK GDP growth should the more positive signals from recent indicators of global and domestic activity not be sustained or should indicators of domestic prices remain relatively weak," the BoE said in its quarterly Monetary Policy Report.

But if growth picked up as suggested by upbeat business surveys since Prime Minister Boris Johnson's unexpectedly emphatic Dec. 12 election win, "some modest tightening" of policy might be needed further ahead, the BoE said.

The central bank no longer specified that such tightening would be "limited and gradual", a long-standing piece of BoE guidance that dated back to a time when a more rapid pace of interest rate increases might have looked likely.

The central bank estimated Britain's economy did not grow at all in the final three months of 2019, a time of political uncertainty when parliament forced a delay to Brexit and a snap election raised the prospect of a change in government.

This will have a knock-on effect on economic growth for 2020, which the BoE forecasts will be just 0.8 percent for the year as a whole, the slowest since the financial crisis.

Growth is seen recovering over the year, however, reaching an annual rate of 1.2 percent by the final quarter of 2020.

Johnson's victory means Britain will formally leave the EU at 2300 GMT on Friday, starting an 11-month transition period during which Britain needs to negotiate a longer-term trade deal with the EU or face tariffs on its exports from 2021.

Even if this deal is reached, the BoE said it now penciled in increased trade frictions from the start of 2021, contributing to a reduction in its estimates of Britain's long-term growth potential.

Lower immigration and weaker business investment would also weigh on the economy, it added.

Investors who expect a BoE rate cut soon may also be encouraged by the central bank's subdued inflation forecast.

Inflation is seen staying below the BoE's 2 percent target over the next three years if rates stay at 0.75 percent. BoE forecasts based on market expectations of a cut in rates to 0.5 percent this year show inflation rising slightly above target.

World+Biz

Brexit / United Kingdom (UK)

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • BPC hunts for dollar to import fuel oil
    BPC hunts for dollar to import fuel oil
  • Representational Image. Photo: Mumit M/TBS
    Govt to list products to suspend imports amid dollar crisis
  • Infographic: TBS
    With 2 months left, 45% ADP fund still unspent 

MOST VIEWED

  • Photographer: Victor J. Blue/Bloomberg
    Global business is enduring a synchronised slowdown
  • Illustration: TBS
    Governments should subsidise food and energy, says IMF boss
  • U.S. President Biden speaks to reporters while departing at Des Moines International Airport in Des Moines, Iowa, U.S., April 12, 2022. REUTERS/Al Drago
    Biden to launch economic plan for Indo-Pacific region
  • South Korean President Yoon Suk-yeol and Samsung Electronics Vice Chairman Lee Jae-yong stand next to US President Joe Biden during a visit to a semiconductor factory at the Samsung Electronics Pyeongtaek Campus in Pyeongtaek, South Korea, May 20, 2022. REUTERS/Jonathan Ernst
    First stop Samsung: Biden touts South Korean role in securing global supply chains
  • FILE PHOTO: A shop sign of Hyundai is seen outside a car showroom in Bletchley, Milton Keynes, Britain, May 31, 2020. REUTERS/Andrew Boyers/File Photo/REUTERS
    Hyundai Motor Group to invest more than $10 billion in US up to 2025
  • An employee checks freshly roasted coffee beans during cooling down in a tumbler at H. Schwarzenbach coffee roastery in Zurich, Switzerland December 4, 2018. REUTERS/Arnd Wiegmann/File Photo
    Coffee demand up but not yet percolating at pre-pandemic levels

Related News

  • EU ambassador to UK says bloc won't change mandate in Brexit talks
  • UK cost of living crisis to peak later this year, BoE to press on with rate rises
  • Britain eyes green trade to end world's dependence on Russian energy
  • Britain to set out new steps to tackle post-Brexit N Ireland trade
  • UK unemployment falls to lowest since 1974

Features

Why everybody wants to be like TikTok

Why everybody wants to be like TikTok

15h | Panorama
Illustration: TBS

How the ban on porn sites spawned a local cybersex industry

18h | Panorama
3 best affordable sunscreens for all

3 best affordable sunscreens for all

18h | Mode
Warah uses three types of khadi material: a sheer and light one, a medium count and a thicker one.

Warah: Embroidered with culture and womanhood

20h | Mode

More Videos from TBS

Investors, public to suffer from electricity price hike

Investors, public to suffer from electricity price hike

7h | Videos
Health benefits of summer fruits

Health benefits of summer fruits

8h | Videos
The way Bangladesh saves almost extinct fish

The way Bangladesh saves almost extinct fish

9h | Videos
Padma’s Char now largest grazing-ground

Padma’s Char now largest grazing-ground

9h | Videos

Most Read

1
Tk100 for bike, Tk2,400 for bus to cross Padma Bridge
Bangladesh

Tk100 for bike, Tk2,400 for bus to cross Padma Bridge

2
A packet of US five-dollar bills is inspected at the Bureau of Engraving and Printing in Washington March 26, 2015. REUTERS/Gary Cameron
Banking

Dollar hits Tk100 mark in open market

3
PK Halder: How a scamster rose from humble beginnings to a Tk11,000cr empire
Crime

PK Halder: How a scamster rose from humble beginnings to a Tk11,000cr empire

4
Bangladesh at risk of losing ownership of Banglar Samriddhi
Bangladesh

Bangladesh at risk of losing ownership of Banglar Samriddhi

5
BSEC launches probe against Abul Khayer Hero and allies
Stocks

BSEC launches probe against Abul Khayer Hero and allies

6
The story of Bangladesh becoming a major bicycle exporter
Industry

The story of Bangladesh becoming a major bicycle exporter

The Business Standard
Top
  • Home
  • Entertainment
  • Sports
  • About Us
  • Bangladesh
  • International
  • Privacy Policy
  • Comment Policy
  • Contact Us
  • Economy
  • Sitemap
  • RSS

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net

Copyright © 2022 THE BUSINESS STANDARD All rights reserved. Technical Partner: RSI Lab