Bank of England inflation forecast, next week could give an idea on future hike

Saturday, August 9th 2014 - 06:33 UTC

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Governor Mark Carney said last month that the BoE needed to start hiking record-low interest rates in the coming months as the British economy picks up

The Bank of England opted this week to keep its main interest rate at a record-low level of 0.50% against a backdrop of solid British economic growth. The central bank's nine-member monetary policy committee decided also to maintain the level of cash stimulus in the economy at £375 billion, it said in a statement.

Bank of England governor Mark Carney said last month that the BoE needed to start hiking record-low interest rates in the coming months as the British economy was rapidly gaining strength.

Speculation that a hike could come either late this year or early in 2015 have helped to boost the British pound against other currencies in recent months.

Reasons behind Thursday's decisions will be given next week when the Bank of England publishes its latest forecasts on inflation. Minutes of the latest policy meeting will be released in two weeks' time.

In the second quarter, Britain's economy grew strongly to become larger than before the global financial crisis. GDP expanded by 0.8% between April and June from the first quarter, when it grew by the same amount, recent official data showed.

The latest figures, along with a sharp fall in unemployment to the lowest level for five years, could give a boost to the government before a general election next year.

The Bank of England's key task is to keep British 12-month inflation close to a government-set target of 2%. The rate accelerated to 1.9% in June.

The International Monetary Fund recently forecast that growth in Britain, a member of the European Union but not of the Euro zone, would outpace the world's major advanced economies this year.

Categories: Economy, Politics, International.

Tags: Bank of England, British economy, Euro zone, European Union, International Monetary Fund, IMF, Mark Carney, UK GDP.

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golfcronie
Glad at last that the years of austerity are bearing fruit, take a leaf out of the UK book. Argies thats progress.
Aug 09th, 2014 - 07:18 am 0
Conqueror
@1. Don't be daft. Argies would never accept and voluntarily adopt austerity. It's all “want it now” and “gimme, gimme, gimme”. When was the last time you heard them say that they would “like” something, but can't afford it. They're like little kiddies on a walk down the high street. Every shop window has something that they have to have “now”. Remember the train crashes? “It's working. It'll go on working”. “Must have those combat aircraft”. “Must have new aircraft for the airline”. And when they can't have, everyone's out to get them. Imagine how much money CFK and “the big dead one” have spent over the last 10 years to make argieland “viable”. Suppose they'd thought “The first thing we must do is pay off our debts”. But no, they have to have their cities with all modern appurtances, they must have a “flagship” airline the envy of the world, they must have oil. They must match Chile, Venezuela, the United States. Can we all imagine what it would really be like if Britain was to withdraw from its little base? Before long, argiealand would be striding around the South Atlantic throwing its inconsiderable weight about. Of course it would be amusing. Remember the fuss over the Libertad. But, at the same time, argieland had to take part in a “naval exercise”. For prestige. And the hulk had to be withdrawn for repairs. That couldn't be done because argieland didn't want to pay. Notice that it's always about money? Like kids, money burns a hole in their pockets. They have to spend it.
Aug 09th, 2014 - 09:47 am 0
Lucdeluc
This is migration based economic growth.
Aug 09th, 2014 - 10:15 am 0

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