Bank of England stand-by on optimism over a solution to the Euro debt crisis
The Bank of England has resisted injecting further emergency liquidity to the UK economy as optimism over finding a solution to the Euro zone debt crisis grew.
Bank governor Sir Mervyn King and his colleagues on the Monetary Policy Committee (MPC) held the quantitative easing (QE) stock at £325 billion and maintained interest rates at record lows of 0.5%.
The official release said that “BoE MPC today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £325 billion. The minutes of the meeting will be published on Wednesday 20 June”.
While the decision echoed that of the European Central Bank on Wednesday, China's central bank moved to shore up its powerhouse economy by slashing its benchmark interest rate for the first time since 2008, dropping the one-year deposit rate to 3.25% from 3.5%.
World markets were boosted by the move, as well as improved sentiment in the European continent where political leaders were holding talks over the future of the single currency, including tackling the banking crisis in Spain, probably with a bail-out agreement over the week-end.
Chancellor George Osborne has said he is “optimistic” a solution will be found to the Spanish banking crisis, while Prime Minister David Cameron pushed his Euro zone counterparts to act quickly.
Sir Mervyn has frequently cited the Euro zone's woes as the biggest threat to the UK economic recovery and has urged political leaders to form an urgent response.
Pressure on the Bank to implement more stimulus measures has been mounting in recent weeks after official figures showed the UK's double-dip recession was deeper than previously thought, with a 0.3% fall in the first quarter of 2012, and a survey revealed a sharp contraction in the manufacturing sector.
But hopes for the UK recovery were boosted on Thursday when a closely-watched survey of the powerhouse services sector in May revealed robust growth, allaying some concerns over a worse-than-expected report on the smaller manufacturing sector last Friday.
Anna Leach, the CBI's head of economic analysis, said the MPC's decision would have been a “tricky one”. She said: “It seems that a 'wait and see' position has been adopted for the moment.
”The ongoing crisis in the Euro area will continue to put pressure on fragile business conditions for the foreseeable future. But we still expect the UK economy to improve modestly later in the year, with further falls in inflation providing some support to family incomes”.
Likewise another encouraging data was that UK new car sales jumped to 162.288 in May, 7.9% rise compared with May 2011, according to the Society of Motor Manufacturers and Traders (SMMT).
This was the largest percentage increase in registrations for 23 months, thanks largely to a 14.3% increase in private sales, says SMMT. The sharp rise in May brings the total for 2012 up to 868,166, a 2.6% rise over the same period last year. The fleet market was up 4.8%, ending a three-month decline.
“May's 7.9% increase in new car registrations is good news for the motor industry and the UK economy,” said Paul Everitt, SMMT chief executive.
“The consistent climb in new car registrations during the first five months of the year suggests that confidence is returning, despite financial uncertainty in the Euro zone”. The best-selling car in May was the Vauxhall Corsa, but the Ford Fiesta remains the UK's most popular new car in 2012, with 50,507 sold so far.
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and the germans want it, pumpt into us, now, and it slowly leaks to them,
soddy offy,
we can have it, when we are out of the euro gravy train.
www.telegraph.co.uk/finance/newsbysector/banksandfinance/9312513/UK-banks-sitting-on-40bn-of-undeclared-losses.html
The cnut Brown, the unelected Prime Minister (our sytem allows this charade) the 'Man Who Saved The World' but didn't, re-appointed King when it was obvious to everyone else he was a Wanker of the First Order .
And a PM who has never held a job in the real world except in his fathers company (in the P.R. department) and inherited the proceeds from it to put to his (already) millions: and who is this person, David Cameron, aka Camoron.
I voted conservative all my life until the muppet Cameron and I just couldn't stomach it even tjhough I had voted for John Major!. He was so obviously a 'Bad Un' that the Conservatives deserve everything that is coming to them.
The Germans are the key to 'solving' this .They have been happy building up large trade surpluses with their European partners based on a typically efficient German industrial machine and typically inefficient southern Eurozone economies (including France to a certain extent).They have had an approximately inbuilt 30% cost advantage over the southern Eurozone.
Until the 'Crunch' they were quite happy recycling the money to the southern Europeans (and Irish) who largely decided to put the money in property.Thus Ireland ends up building more new homes per annum than Britain with a population 13 times the size and Spain ends up with more empty properties than the whole of the USA.
The Germans , as the key players ,have a choice ;either let the PIIGS go bust in which case they lose out on their previous large profits from selling BMWs ,Audis and Mercs to them or else subsidise them add infinitum or until they become as efficient as the Germans (which is never).
To my mind the best analogy is a horse race; the Germans are the sleek race winning thoroughbred with excellent past form, the British and the French are carthorses with some chance of completing the race and maybe ending in the top three. The PIIGS are little donkeys with no chance of completing the race and a good chance of dropping dead from exhaustion halfway through the race.
It all seems so obvious now and some of the founders of the Eurozone are coming out of the woodwork saying they had their doubts.Short of catastrophic wars this looks like it is going to inflict more harm on the Eurozone,Europe and the world than anything in living history.
It is very apt that hubris is a Greek word ( coming from the founders of western civilisation) as this is beginning to look like it may be the end of it !
CAMARON out
CONSERVATIVES out
UKIP in,
they cant do any worse,
but mayby just a bit better,
go on give em a try,
I must admit I do like Nigel Farage and the way he puts his views to the 'Gods of Brussels'.
But where would UKIP be if not for him? A good personal friend of mine has been trying to get himself elected for UKIP: 10 years and still not in!
And why? He tells me it may be because they are seen as a one-trick pony.
Who can say? :o)
You may well be right,
What we need is an alternative to labour and conservative,
And its either lib/dem, or ukip,
The way I see it, [and its simple]
Both parties, in opposition and in power, both promised,
1, euro referendum,
2, with drawls of the EHRI
3, control of immigration
4, and the return /rebuild of our forces,
,,,,,,,,,,,,,,,,,,,,,,,,,,,
Both parties have failed miserably, and sadly lib/dem, are anti, British , military,
Anti nuke,,, pro EU , pro EU and pro EU,
, so we are left with UKIP,
They need if poss., to push and fight all out, to prove to the public, that they are NOT a one click party,, if they fail to do this, then we are stuck with these idiots,
As I think we both agree,
It is better to have it , and not use it, rather than not have it, and badly need it,
And all the euro crap, yes it does effect us badly in the short term, but in the long term, we can only benefit, and grow again, being a maritime nation,
After all, if we help save this euro, and it became strong and powerful, how long before some bent politician , says, lets join,
Just my opinion.
.i dont particualy follow any partie, just who i think at the time is offering the best for the UK .
I agree the present two + New Labour are just beyond the pale and you may be correct in what you say about UKIP.
But how the hell do you convince the 'masses' to vote for them?
Is it not.
We will just have to wait until 2015, unless Cameron falls sooner .
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