UK MPC Rate Statement

Bank of England governor Mark Carney is nothing if not a fast learner. Last month Federal Reserve chairman Ben Bernanke illustrated how panicky the markets can be when the cost of borrowing looks like climbing. It was widely considered naive of him to answer a straight question with a straight answer when he bluntly stated that the Fed must, at some point, stop printing extra dollars at the rate of $85bn (£56.2bn) a month. The markets, in essence, took his words to mean that ultra low borrowing costs were coming to an end. It ...

As Mark Carney settles into his new job, it is natural to ask what kind of change in policy style the new Bank of England governor may herald. Mr Carney faces a UK economy that is still struggling to achieve a sustained recovery, particularly given the prospect of seven more years of government austerity. With the Treasury unable or unwilling to fulfil its usual fiscal role in supporting the economy - via spending - the pressure remains on the monetary authorities to do more. That "more" could come in the form of "forward guidance" - ...

Today’s monthly report on the Halifax House Price Index will probably deliver more good news for Britain’s economic outlook. Later, the European Central Bank and the Bank of England are scheduled to dispense interest rate announcements. Keep in mind that Europe's economic news will receive added attention with US markets closed for the July 4 holiday. Also, with a new round of political crisis roiling Portugal, the crowd will be filtering today’s numbers through the prism of what the headlines tell us with regards to events on the ...

Incoming economic data suggests that the six members of the Monetary Policy Committee who have previously voted against additional QE will again spurn more easing. This week, services PMI rose to 56.9, the highest since March 2011. This is good news since approximately 75% of the UK’s economic output comes from the services sector. And the composite measure of PMI has been steadily increasing over the last few months. Encouragingly, services, construction and manufacturing PMIs are now in expansionary territory. Additionally, the ...

In its most recent e-mail poll, which was finalised on 25th June, the Shadow Monetary Policy Committee (SMPC) decided by five votes to four that Bank Rate should be raised on Thursday 4th July. Four members of the shadow committee wanted an increase of ½%, while one advocated a rise of ¼%. This split vote for a rate hike would imply a rise of ¼% on normal Bank of England voting procedures. However, four SMPC members believed that Bank Rate should be held at its present ½% for the time being. Most members of the shadow committee saw ...

The incoming governor is going to have a busy week, and may find he doesn't have as much control here as he did in Canada. Most people are happy to keep a low profile on their first day in a new job while they work out where the photocopier is and how the phones work. Mark Carney, however, is inviting in a television crew. It won't be an easy induction. With financial markets in a funk, and the economy in an even deeper hole than we thought, judging by the statisticians' latest pronouncements, Carney will need to roll his sleeves up. ...