BoE holds rates, signals next move likely to be a hike

By FXStreet FXStreet – The BoE today held its rate steay at a record low level of 0.5 per cent in line with broad market ecpectation. The MPC voted unanimously to hold rates steady with the lone hawk Ian McCafferty deciding to drop his demand for a rate hike. BoE governor Carney flagged weak global growth concerns stressing that slowdown in emerging economies led by China is impacting Britain’s economic progress despite the resilience shown by economy.

He highlighted the risks arising from turbulent financial markets, capital outflowws and rebalancing of the Chinese economy. He noted that risks to Britain is rising. He noted “All of these developments pose downside risks to growth in the United Kingdom via trade, financial and confidence channels”. He particilarly mentioned that trade outlook looked grim “with net exports expected to drag on UK growth over the forecast period.” According to the BoE, fall in the value of sterling by more than 3 percent over the past three months reflects global growth concerns, lower rates expectation and also the uncertainty that prevails with respect to Brexit.

The current global economic situation demands central banks to adopt more accomodative policy. Loose monetary policy is the need of …read more

Source:: FX Street