Bank of England announces Maintaining Rates Amid Investor Speculation on Cuts

Asma Ahmed - | World

The Bank of England is expected to maintain its highest interest rates in nearly 16 years amid indications that inflation could reach the bank's 2% target sooner than expected.

The recent decline in energy prices has led economists to predict inflation could align with the target as early as April, contrasting with the Bank of England's forecast of late 2025. A slow "last mile" for inflation prompted the bank to caution last year that rates would need to remain high for an "extended period." However, economists now anticipate only one policymaker voting for a rate rise, and some believe another may vote for a rate cut for the first time since March 2020.

In December, three of the Bank of England's nine policymakers voted for a rate increase to 5.5% from 5.25%, citing rapid wage growth. Governor Andrew Bailey is expected to address the issue at a press conference following the rate decision. While some predict a victory lap on lower inflation, others, such as Mohit Kumar, Chief European Economist at Jefferies, believe it may be too soon to declare victory. He expects one official to vote for a rate cut. Economists polled by Reuters last month forecast rate cuts beginning in the second quarter of this year.

British economic growth has been sluggish, prompting the International Monetary Fund to project a meager 0.6% growth for 2024, making it the second-weakest in the Group of Seven. This economic backdrop, coupled with the possibility of further tax cuts in the March budget, may make the Bank of England cautious about signaling future policy loosening. Concerns about wage inflation persist, with annual wage growth, excluding bonuses, at 6.6% in the three months to November.

The Bank may also consider the impact of higher freight costs due to attacks on shipping in the Red Sea, potentially complicating rate cuts if conflicts in the Middle East persist. Karen Ward of J.P. Morgan Asset Management suggests that the bank may emphasize placing less weight on transitory low inflation, especially if it risks being temporary and insufficient to justify a rate cut.

About Author

Asma Ahmed
Asma Ahmed
1648 Total posts


Read Also

World
Calgary Gets Relief: Water Restrictions Ease, Pools Reopen as Reservoir Recovers

Calgary eases water restrictions as reservoir recovers, allowing hand watering and reopening public pools. Fire ban lifted, letting residents enjoy BBQs again. City moving cautiously towards normalcy.

World
Travelers are discovering less expensive alternatives to the Schengen visa

More and more tourists are finding less expensive options for the Schengen visa.

World
A strong Earthquake of magnitude 6 hits Peru

According to the German Research Centre for Geosciences (GFZ), a significant earthquake measuring 6.0 on Saturday occurred off the coast of Peru. The earthquake's epicentre was 24 kilometers below ground.

World
Philippine President Marcos plans UAE visit in November, confirmed by first lady

In a landmark announcement, Philippine President Ferdinand R. Marcos Jr. is slated to visit the UAE in November, marking a significant event for the Filipino community abroad.

World
How to obtain a Japanese e-Visa during Japan's suspension of service

The steps to take in order to acquire a Japanese e-Visa while Japan is suspending its services.

World
Japan recently suspended the Japanese e-visa system and rejected travelers' applications

A recent suspension of the Japanese electronic visa system and the rejection of applications from tourists occurred in Japan.

World
The Canadian government announces new decisions to grant permanent residency to illegal immigrants

A new program revealed by Canadian Immigration Minister Mark Miller, to help undocumented immigrants stay and apply for permanent residency in Canada.

World
Canada issues widespread warnings for thunderstorms and rain in Quebec

This morning, the Ministry of Environment and Climate Change Canada announced widespread weather warnings today, as it issued a threat of thunderstorms in southern Quebec.

World
US East Coast Heatwave Extends to West, Bringing Dangerous Temperatures

Over 100 million people across the United States found themselves under heat warnings on Sunday as a sprawling heat dome extended its grip from the East Coast to the West Coast, bringing record-breaking temperatures to cities on the eastern seaboard....

World
Apple accused of violating EU tech regulations, and other additional breaches

European Union antitrust regulators have leveled accusations against Apple, alleging violations of the bloc's tech regulations.

World
A strong magnitude 6.2 earthquake struck near the coast of Venezuela

On Sunday, the German Research Centre for Geosciences (GFZ) announced that a powerful earthquake with a magnitude of 6.2 struck near the coast of Venezuela.

World
UK Manchester airport experiences "widespread disruption" due to power outage

The airport operator reported that a "significant" number of flights at the third-busiest airport in the UK were either delayed or cancelled on Sunday due to a massive power outage.

World
SriLankan Airlines prepares for expansion across the Middle East with new routes

Sri Lanka Airlines is gearing up for substantial growth in the Middle East region following the acquisition of additional aircraft on lease this year.

World
India Launches E-Gates for International Arrivals at 21 Airports

In a landmark move aimed at enhancing the travel experience for Indian nationals and OCI (Overseas Citizen of India) cardholders arriving at Delhi airport, Union Home Minister Amit Shah inaugurated the Fast Track Immigration—TTrusted Traveler...

World
WHO cautions users against counterfeit Ozempic batches

Three counterfeit quantities of Ozempic, a medication that contains the active ingredient found in Novo Nordisk's diabetes treatment and weight-loss drug, Wegovy, have been the subject of a stern warning from the World Health Organization (WHO)....

World
Indian Airlines Release Urgent Travel Advisory for UAE Visitors

Indian airlines have recently issued comprehensive guidance for travelers from India planning visits to the United Arab Emirates (UAE) on visit visas. These advisories are crucial for ensuring a smooth travel experience and compliance with UAE entry...

World
India: Delhi heat index crosses 50, prompting weather office to issue red alert

The Indian Meteorological Department (IMD) has forecasted a reduction in the severe heatwave conditions prevailing over Delhi, starting from today (Thursday).

World
The reasons for delays in obtaining Schengen visas

There are several reasons why obtaining Schengen visas can be delayed.

World
French President Macron Declares snap elections

Emmanuel Macron, president of France, has announced early elections following a crushing defeat for his alliance in the European elections. Macron expressed his plan to dissolve the national assembly and hold new legislative elections.

World
Bahraini government officially announces Eid Al-Adha 2024 holiday schedule

The dates for the Kingdom of Bahrain's Eid Al Adha have been announced.

World
Two Tram collision injures many in Siberia's Kemerovo region

n the southwestern Siberian city of Kemerovo, a collision between two trams resulted in injuries to a total of 67 individuals, as reported by the TASS news agency.

World
Indian embassy cautions youth against accepting job offers on social media

The Indian Embassy in Myanmar has issued a stark warning against the proliferation of fraudulent job schemes targeting unsuspecting individuals, particularly the youth.

World
An aircraft engine causes the death of a person at Schiphol Airport in Amsterdam

An airplane engine tragically kills a person at Schiphol Airport in Amsterdam.

World
Germany: Multiple injured in horrific knife assault in distressing incident

A man armed with a knife attacked attendees of a far right-wing information stand affiliated with the Büergerbewegung Pax Europa (BPE) at the central market in Mannheim, Germany, where a violent incident transpired. Around 11:35 a.m., a series of...

World
The US EB-5 Golden Visa Program provides comprehensive details and features

The United States EB-5 Golden Visa Program offers a comprehensive set of details and features.

World
Thailand extends visa stays for tourists, students, digital nomads

Thailand's government has approved longer visa stays for tourists, postgraduate students, remote workers, and retirees. This decision is part of a strategic effort to revive the nation's struggling economy, with tourism being a critical...

World
A famous Indian airline introduces a special seating option for women

IndiGo, a budget airline, recently followed Air India's lead by introducing a new option for solo female travelers. This initiative allows women to select seats adjacent to other female passengers for added comfort and security during their...

World
Indian police arrest unlicensed hospital boss after six babies die in a fire

The tragic incident at an unlicensed hospital in New Delhi sheds light on the devastating consequences of negligence and a lack of adherence to safety regulations.

Canadian government offers $362 million to temporarily house asylum seekers