#Monetary Policy Committee at the Bank of England

[timesofocean]

Turmoil in banking industry could be current biggest threat to global economy

New Post has been published on https://www.timesofocean.com/turmoil-in-banking-industry-could-be-current-biggest-threat-to-global-economy/

Turmoil in banking industry could be current biggest threat to global economy

London (The Times Groupe) – High interest rates, particularly in Europe, could pose the most immediate threat to the global economy due to turmoil in the banking sector.

Markets were shaken by the bankruptcy of Silicon Valley Bank (SVB) and Signature Bank in the US last month, as well as Saudi National Bank’s announcement that it would not be increasing its stake in Swiss-based Credit Suisse. interests interests  global economy

UBS, Switzerland’s largest bank, bought Credit Suisse with government assistance for 3 billion Swiss francs ($3.2 billion). times

As countries around the world struggle with a cost of living crisis and central banks have been raising interest rates to lower persistent inflation, the turmoil in the banking industry came at a bad time.

In an interview with Anadolu, Jon Danielsson, the director of the Systemic Risk Centre at the Department of Finance at the London School of Economics, explained that increasing interest rates to combat high inflation causes banks that have bonds and loans to lose value.

Early in March, SVB announced that it had sold its $21 billion bond portfolio at a loss of $1.8 billion. A discount of $16.5 billion was offered to First Citizens Bank for the deposit and loan portfolio of SVB after it was quickly closed by US regulators.

“When central banks raise interest rates, the aim is to slow growth. The fact that bond prices have fallen is part of the normal consequence when you raise interest rates a lot. That is a channel, the transmission of policy rates onto real activity,” Michael Saunders, a senior economic advisor at Oxford Economics and a former member of the Monetary Policy Committee at the Bank of England, told the Turkish state-run news agency Anadolu.

The US banks tightened lending standards before the recent strains in the banking system, reflecting higher interest rates and slower economic growth expectations, and those who failed had poor management.

[head-post]

BoE cuts key UK interest rate to 4.5%

The Bank of England (BoE) has cut its main interest rate for the third time in six months as the British economy stagnates, according to AP News.

The BoE said on Thursday that the Monetary Policy Committee had cut its main interest rate by a quarter of a percentage point to 4.50 per cent, the level since mid-2023. The move reflects some concern about the outlook for the British economy.

Official data earlier this month showed an unexpected drop in the inflation rate to 2.5 per cent year-on-year through December, mainly due to easing price pressures in the services sector, which accounts for about 80 per cent of the UK economy.

Another potential reason to lower borrowing rates is the country’s stagnant economic growth.

As inflation has fallen from multi-year highs, central banks, including the US Federal Reserve, have started to cut interest rates. However, economists believe that rates are unlikely to fall to the ultra-low levels that persisted in the years following the 2008-2009 global financial crisis and during the pandemic.

Read more HERE

[lmforexpro]

We are already at a high level of restriction of monetary policy

England Bank Swati Dingra, a member of the MPC’s Monetary Committee (MPC) late on Monday, said that the restriction of monetary policy is already “high level”. Main quotes We are already at a high level of restriction of monetary policy.Medium -term inflation stresses.Food prices take, but do not see the same high import costs as before.UK consumption is unusually weak in Europe due to the high…

[accapitalmarket]

Inflation Rebound Sank UK Stocks, GBPUSD Lower

UK stocks fell on Wednesday after inflation jumped in January, while the pound was mixed as the data only slightly dented the path for further Bank of England (BoE) rate cuts.

The UK consumer price index (CPI) rose by an annualised rate of 3.0% in January, up from 2.5% in December and above forecasts for a 2.8% increase. It was the sharpest annual rise in CPI since March 2024's 3.2% increase.

Core CPI – which excludes volatile food and energy prices – was up an annualised 3.7% in January, from 3.2% in December. Service price inflation accelerated to 5.0% from 4.4%, but that was below a 5.2% Bank of England forecast.

That chink of good news could still see the BoE Monetary Policy Committee (MPC) resume their rate cutting path in May, as expected, following a pause at their next meeting on March 20, but after that there may be more measured reductions. The MPC reduced UK interest rates by 25 basis points at its meeting on February 6.

On foreign exchanges, those rate cut expectations and ongoing global trade war worries, saw sterling lose 0.29% against the US dollar to 1.2576. But the pound edged up 0.04% versus the euro to 1.2078.

At the stock market close in London, the blue-chip FTSE 100 index was down 0.6% at 8,7132, while the broader FTSE 250 index ended 0.8% lower at 20,707.

GBPUSD H1

Housebuilders came under pressure as investors worried about rising inflation, with Barratt Redrow down 3.1%, Persimmon off 1.2%, and Taylor Wimpey losing 1.4%.

Elsewhere, airlines flew lower after Jet2 warned its profit margins in the year ahead would come under some pressure due to cost increases. AIM-listed Jet2 dropped 10.7%, while, among blue-chips, British Airways-owner IAG shed 3.0%, and easyJet fell 3.9%.

With results, banking giant HSBC nudged 0.3% lower even as it posted a rise in annual profits and announced a $2bn share buyback.

And Glencore dropped 7.3% after reporting a swing to an annual loss as the cost of goods sold increased faster than revenue growth. The commodities group also said it may consider transferring its primary listing out of London if it becomes clear that another venue would be better.

But BAE Systems reversed earlier losses to gain 0.6% as it posted a rise in full-year profit and a record order backlog.

Elsewhere, BP added 0.2% following a report it is considering a potential sale of its lubricants business, which operates under the Castrol brand and could be worth about $10bn.

Chilean copper miner Antofagasta gained 0.8% after a double upgrade to 'overweight' by analysts at JPMorgan Chase, who cited a positive long-term copper outlook.

UK100Roll H1

However, broker comment weighed among the mid-caps. Trainline dropped 7.8% as analysts at JPMorgan cut their rating for the rail ticketing platform to 'neutral' from 'overweight'.

Under-pressure oil services firm John Wood Group plunged 16.6% as Kepler Cheuvreux analysts downgraded their stance to 'reduce' following a recent warning on cashflow.

And Tate & Lyle shed 1.8% as analysts at Berenberg reduced their stance for the food ingredients company to 'hold' from ‘buy’ after last week’s results.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

Trading margin forex and CFDs carries a high level of risk and may not be suitable for all investors. Investors could experience losses in excess of total deposits. You do not have ownership of the underlying assets. AC Capital Market (V) Ltd is the product issuer and distributor. Please read and consider our Product Disclosure Statement and Terms and Conditions, and fully understand the risks involved before deciding to acquire any of the financial products provided by us.

The content of this market commentary is owned by AC Capital Market (V) Ltd. Any illegal reproduction of this content will result in immediate legal action.

[third-new]

Bank of England slash hopes of growth for the British economy in 2025 - national

Bank of England Half of its growth for the British economy this year as it reduced its important position Interest rate Thursday for the third time in six months. In a statement, the bank's nine -member monetary policy committee reduced its basic interest rate by 4.50 percent to one -percent point, which was taken to its lower levels since mid -2023. The decision was widely expected in the…

[newtras]

Bank of England slash hopes of growth for the British economy in 2025 - national

Bank of England Half of its growth for the British economy this year as it reduced its important position Interest rate Thursday for the third time in six months. In a statement, the bank's nine -member monetary policy committee reduced its basic interest rate by 4.50 percent to one -percent point, which was taken to its lower levels since mid -2023. The decision was widely expected in the…

[satrthere]

Bank of England slash hopes of growth for the British economy in 2025 - national

Bank of England Half of its growth for the British economy this year as it reduced its important position Interest rate Thursday for the third time in six months. In a statement, the bank's nine -member monetary policy committee reduced its basic interest rate by 4.50 percent to one -percent point, which was taken to its lower levels since mid -2023. The decision was widely expected in the…

[usnewsrank]

Bank of England’s tepid rate cut risks prolonged stagflation

  The Bank of England’s hesitant approach to tackling the UK’s economic malaise is setting the stage for prolonged stagnation, warns Nigel Green, CEO of global financial advisory giant deVere Group   The Monetary Policy Committee (MPC) voted 7-2 to cut rates by a modest 25 basis points to 4.5%, despite slashing its growth forecast for 2025 in half. Two dissenting members called for deeper cuts,…

[jewellerycompare]

BoE cuts interest rates to 4.5%

The Bank of England (BoE) has voted to cut interest rates from 4.75% to 4.5%, the lowest level since June 2023, but warned that GDP growth has been “weaker than expected”. At its meeting this week, the bank’s monetary policy committee voted by a majority of 7–2 to reduce the rate by 0.25 percentage points. … http://dlvr.it/THqFfp

[trendingnews19]

The Bank of England made its first interest rate cut of the year on Thursday, signalling further cuts were to come as it downgraded the U.K.'s growth forecast for 2025.The central bank cut its benchmark interest rate by 25 basis points to 4.5%, with a majority of seven members out of the nine-strong monetary policy committee voting in favor. Two of the MPC's members had voted for a larger cut of 0.5 percentage points.Andrew Bailey, governor of the Bank of England, told reporters that the central bank expects to make further rate cuts this year."We expect to be able to cut bank rate further as the disinflation process continues. But we will have to judge meeting by meeting how far and how fast.""We live in an uncertain world and the road ahead will have bumps," he said in a press briefing.Economists had widely expected the central bank to trim rates, following a spate of lackluster U.K. growth data.The economy flatlined in the third quarter, according to data released in December, while the latest monthly GDP reading showed the economy expanded just 0.1% in November, after shrinking by 0.1% in October. Weak retail data last month also added to expectations that the BOE would cut rates. The BOE on Thursday halved the growth forecast it expected the U.K. to see in 2025, from 1.5% to 0.75%.Britain's inflation rate, meanwhile, fell to a lower-than-expected 2.5% in December, with core price growth slowing further — also fueling expectations that central bank policymakers would steer toward their first trim of 2025. The central bank's inflation target is 2%.The BOE said in a statement that there had been "substantial progress on disinflation over the past two years, as previous external shocks have receded."Nonetheless, it emphasized that "a gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate."Buses pass in the City of London financial district outside the Royal Exchange near the Bank of England on 2nd July 2021 in London, United Kingdom.Mike Kemp | In Pictures | Getty ImagesBOE monetary policy committee members must now judge how to balance the need to boost growth with the inflationary risk posed by a nascent trade war, as U.S. President Donald Trump plans to impose tariffs on America's closest trading partners, and has threatened to apply the same measures on the EU and U.K.The bank's Monetary Policy Committee said it would "continue to monitor closely the risks of inflation persistence and what the evolving evidence may reveal about the balance between aggregate supply and demand in the economy.""Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further," it concluded.Responding to the BOE's interest rate decision, U.K. Chancellor Rachel Reeves said in a statement that the BOE's interest rate cut was "welcome news" but said she was "still not satisfied with the growth rate."The chancellor claimed the Treasury's plans to "kickstart economic growth" would work to "put more money in working people's pockets" and said the government was committed to "taking on the blockers to get Britain building again, ripping up unnecessary regulatory barriers and investing in our country to rebuild roads, rail and vital infrastructure."What comes next?Economists are now pondering the trajectory for interest rates in 2025, given that the central bank's policymakers will be wary of the U.K. finding itself "caught between trade wars and weak domestic momentum," Kallum Pickering, chief economist at Peel Hunt, noted earlier this week."The critical question facing policymakers is whether they will signal that another cut could come as soon as March or that they will stay the course set last year — with rate reductions coming at a pace of one per quarter?," he said in emailed comments Monday.Peel Hunt's base case, he said, was that the BOE will maintain a one-cut-per-quarter pace and that the bank will wait until the May meeting before following up with a second trim this year."However, risks are skewed towards policymakers signalling a willingness to react more forcefully to economic weakness – thus hinting at another cut as soon as the 20 March meeting already," Pickering said.The BOE's first trim of the year comes after a tough couple of months for Reeves who has faced sustained pressure since unveiling Treasury fiscal plans  last fall that set out to increase the tax burden on British businesses. The package attracted widespread criticism from industry leaders over the potential impact on investment, jobs and economic growth. Reeves defended the plans, saying tough measures were necessary to achieve economic stability and that there was "no alternative." She has also said tax rises on businesses would be a one-off, telling the Confederation of British Industry last November that she was "not coming back with more borrowing or more taxes."Some economists believe the central bank could take a more gradual approach given the inflationary risks posed by potential Trump tariffs, and the fiscal position being taken by the U.K. government."Despite the recent weak news on activity and the uncertainty around the global outlook due to Trump's US import tariffs, the stronger news on domestic price pressures means the Bank of England will probably continue to cut interest rates only gradually," Ashley Webb, U.K. economist at Capital Economics, said in a note Wednesday."But while CPI inflation may rebound from 2.5% in December last year to around 3.0% later this year, we think a fall to below 2.0% next year will prompt the Bank to cut interest rates ... to 3.50% by early 2026, rather than to 3.75-4.00% as investors anticipate," he noted. atOptions = 'key' : '6c396458fda3ada2fbfcbb375349ce34', 'format' : 'iframe', 'height' : 60, 'width' : 468, 'params' : ;

[influencermagazineuk]

The Bank of England is widely tipped to cut its benchmark interest rate to 4.5% today, which analysts and market observers have widely forecasted. And as we delve into the importance of the decision, you'll also have the opportunity to engage in our live Q&A at 4.30pm with experts addressing your most critical questions. This change of priority reflects a shift, such that inflation-which had long been the key concern-is apparently no longer strong enough to be the unifying force behind monetary policy. Instead, the emphasis has shifted toward preventing stagnation in economic activity and the preservation of stability. Loco Steve from Bromley , UK, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons The Expected Reduction: Implications Cutting from 4.75% to 4.5% isn't news in itself. Most city economists have been predicting this, and the financial markets have already priced it in. Members of the Monetary Policy Committee have, for weeks now, dropped hints that this is what is likely to happen. For those with tracker mortgages, that translates into immediate repayment rate reductions. Savings accounts tied to the interest rate, of course, will fall, too. The decrease is relatively small, so this marks one step in continuing a slow-motion downward spiral started last year. But the big question isn't just about today's cut. It's about what comes next. Will the Bank of England signal that more reductions are on the way? How soon can we expect them? The economic forecasts accompanying the decision will clarify this matter. Growth projections could be downgraded. That would mean that the economy is teetering at the edge of a recession, and possibly more rate cuts may be on the way to prevent a deeper downturn. What This Means for Everyday Britons Lower interest rates lead to mixed bag consequences. Any consumer looking for refinancing mortgage or a fresh loan will benefit from the rate reduction. Other consumers who apply for business funding and those utilizing credit cards shall enjoy lower interest rates. Nevertheless, savers shall have low returns, causing them to opt for other options of investment. Today's announcement carries weight beyond mere numbers and percentages. For example, it will not only depend on what the governor of the Bank of England, Andrew Bailey, reports, but it is also going to be closely watched for what he might say about the overall economic prospects, international influences, and politics—possibly also through the input of Donald Trump's policies or Rachel Reeves' own economic plan. This is not just another run-of-the-mill update-it's an opportunity for the Bank to outline its vision for the UK's financial future. At a time when the global economy is uncertain, today's Monetary Policy Report offers insight into where things might be headed. How to Stay Informed If you’re keen to follow the developments, tune in at 12pm when the official decision is announced. Then, at 4.30pm, join the live Q&A session featuring a panel of experts ready to address your concerns. Whether you’re a homeowner, investor, or just someone curious about how interest rates impact daily life, this discussion will provide clarity. A Look at the Bigger Picture While the interest rate cut headlines today, there is another financial story brewing. A famous Bristol chef has complained that diners are too unwilling to try new culinary experiences because of misconceptions. On the other hand, the UK pub scene is more surprising than one would expect: what is the most popular pub snack in 2025? The answer may surprise you. Elsewhere in the world of finance, it's noted some experts suggest saving large amounts outside of high street savings accounts may be prudent for better deals. And ever been curious what the job is like to work as a bouncer, from how much money to get and whether there's other benefits, so too here's fresh insight. Looking Ahead At 12pm, we’ll see if the Bank of England follows through on expectations and lowers the base rate. The broader question remains: is this just one step in a more significant shift in monetary policy? If you have a question, now is your opportunity to ask. Prepare it and submit ahead of 4.30 pm Q&A for firsthand answers from experts in finances. Stay tuned for real-time updates regarding today's key financial developments and what they mean for you. Read the full article

[odnewsin]

Bank of England anticipated to reduce UK interest rate to 4.50%

London: The Bank of England is widely expected to cut interest rates for the third time in six months later Thursday, even though inflation remains above its target. Most economists think the nine-member Monetary Policy Committee will lower the bank’s main interest rate by a quarter of a percentage point to 4.50 per cent, taking it to its lowest level since mid-2023. The base rate helps dictate…

[accapitalmarket]

UK Stocks Power Higher, GBPUSD Sunk

UK stocks powered higher on Thursday, while the pound sunk, after the Bank of England (BoE) announced a 25-basis point (bp) cut in its key bank rate to 4.50%, with heavyweight miners to the fore as US/China trade war worries eased.

While the BoE meeting move was expected, with seven of its nine-strong Monetary Policy Committee (MPC) backing the 25bp rate cut, the surprise came from two policymakers, Swati Dhingra and Catherine Man, voting for a chunkier 50bp cut.

In an accompanying statement, the BoE noted that economic growth has been weaker than expected at the time of the November Monetary Policy Report, and indicators of business and consumer confidence have declined.

The BoE thinks GDP growth fell by 0.1% in the fourth quarter of 2024 and will rise by 0.1% in the first quarter of 2025. Meanwhile, CPI inflation is now expected to rise quite sharply in the near term, to 3.7% in the third quarter, owing in part to energy prices, before easing again.

GBPUSD H1

On foreign exchanges, the BoE’s weak forecasts and potential for further rate cuts, saw the pound drop 0.62% versus the US dollar to 1.2429 and lose 0.29% to 1.1988.

At the stock market close in London, the FTSE 100 index was ahead 1.2% at 8,727, a fresh closing peak, having hit an all-time high at 8767, surpassing the 8,700 level for the first time. Meanwhile, the FTSE 250 index ended 1.0% higher at 20,973.

Miners provided a boost as the sector rallied, with Anglo American gaining 5.1% as it said annual production across its diverse operations was in line with guidance.

AstraZeneca rose 5.9% as the drugs giant saw its 2024 pretax profit surge 26% to US$8.69 billion, with revenue up 18% to US$54.07 billion.

But on the downside, Compass lost 2.0% after the catering giant reported a 9.2pc increase in first quarter organic revenues but warned of a substantial impact if current foreign exchange rates persist for the remainder of the year.

IMI shed 1.2% after the engineer revealed it had suffered a cyber security incident which involved unauthorised access to the company's systems.

And Halma fell 1.5% as analysts at HSBC downgraded their rating for the safety equipment firm to 'reduce'.

UK100Roll Daily

On the FTSE 250, BBGI Global Infrastructure jumped 17.2% after agreeing to a £1.06 billion takeover from a vehicle indirectly controlled by British Columbia Investment Management.

Other infrastructure investors rose in a positive read-across from the BBGI news International Public Partnerships added 4.6%, while HICL Infrastructure climbed 2.7%.

And Greencore jumped 13.4% as analysts at Deutsche Bank upgraded the Dublin-based convenience foods firm to 'buy' from 'hold' following the company’s Capital Markets Event in London on Wednesday.

Disclaimer:

The information contained in this market commentary is of general nature only and does not take into account your objectives, financial situation or needs. You are strongly recommended to seek independent financial advice before making any investment decisions.

Trading margin forex and CFDs carries a high level of risk and may not be suitable for all investors. Investors could experience losses in excess of total deposits. You do not have ownership of the underlying assets. AC Capital Market (V) Ltd is the product issuer and distributor. Please read and consider our Product Disclosure Statement and Terms and Conditions, and fully understand the risks involved before deciding to acquire any of the financial products provided by us.

The content of this market commentary is owned by AC Capital Market (V) Ltd. Any illegal reproduction of this content will result in immediate legal action.

[third-new]

Bank of England limits interest rates among the weaker growth prospects

The Bank of England for the first time reduced the interest rate on Thursday, and further signaling cuttings were to take place when it reduced the UK growth forecast for 2025. The central bank reduced the reference point by 25 base points to 4.5%, with a majority of seven members from the nine -member Monetary Policy Committee vote for. Two MPC members voted for a larger reduction by 0.5…

[newtras]

Bank of England limits interest rates among the weaker growth prospects

The Bank of England for the first time reduced the interest rate on Thursday, and further signaling cuttings were to take place when it reduced the UK growth forecast for 2025. The central bank reduced the reference point by 25 base points to 4.5%, with a majority of seven members from the nine -member Monetary Policy Committee vote for. Two MPC members voted for a larger reduction by 0.5…

[satrthere]

Bank of England limits interest rates among the weaker growth prospects

The Bank of England for the first time reduced the interest rate on Thursday, and further signaling cuttings were to take place when it reduced the UK growth forecast for 2025. The central bank reduced the reference point by 25 base points to 4.5%, with a majority of seven members from the nine -member Monetary Policy Committee vote for. Two MPC members voted for a larger reduction by 0.5…