Money: Bank keeps interest rates at 0.75% as Brexit looms - PressFrom - United Kingdom
  •   
  •   

Money Bank keeps interest rates at 0.75% as Brexit looms

05:50  14 september  2018
05:50  14 september  2018 Source:   news.sky.com

Treasury in talks with BoE's Carney to extend stay

  Treasury in talks with BoE's Carney to extend stay The Treasury and Bank of England are in talks over whether Governor Mark Carney is prepared to stay beyond his official tenure at the bank. Sky News has learned that talks are ongoing among the three parties as to whether Mr Carney would consider continuing in his role beyond his planned departure date of June 30 next year.At his appointment in 2013, Mr Carney originally planned to serve just five years of a maximum eight-year term as governor.But in October 2016 he agreed to stay for an extra year, until mid-2019, to see Britain past its expected departure from the European Union.

The Bank of England's Monetary Policy Committee has hiked interest rates © Reuters The Bank of England's Monetary Policy Committee has hiked interest rates

The Bank of England has maintained interest rates at 0.75% as the clock ticks down to Brexit in March next year.

The monetary policy committee (MPC), which voted unanimously in favour of no change to the benchmark rate, raised its projection for UK economic growth in the current third quarter to 0.5% from 0.4%.

However, the minutes from the meeting stated there was little data to shift its earlier forecasts.

Download the all-new Microsoft News app – available now on iOS and Android

The MPC did however continue to point to increased downside risks from "recent developments" in the global economy - notably US president Donald Trump's trade battles.

Carney may stay at BoE for 'smooth' Brexit

  Carney may stay at BoE for 'smooth' Brexit Bank of England governor Mark Carney has signalled that he is prepared to extend his tenure in order to promote a "smooth" Brexit.Speaking to MPs on the Treasury select committee, Mr Carney said: "Even though I have already agreed to extend my time to support a smooth Brexit, I am willing to do whatever else I can in order to promote both a smooth Brexit and an effective transition at the Bank of England.

The minutes said: "In emerging market economies, indicators of growth have continued to soften and financial conditions have tightened further, in some cases markedly.

"Recent announcements of further protectionist measures by the United States and China, if implemented, could have a somewhat more negative impact on global growth than was anticipated at the time of the August (Inflation) Report.

It was at that August meeting that the Bank last raised rates, leaving them above 0.5% for the first time in almost a decade.

There is an expectation among many economists that it will be the last increase before the UK is due to leave the EU in March 2019.

The Bank said on Thursday: "The MPC continues to recognise that the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal.

The pound is soaring after reports of a major Brexit compromise from Germany

  The pound is soaring after reports of a major Brexit compromise from Germany The British pound jumped versus the US dollar after a report said Germany is prepared to make a major Brexit compromise. Bloomberg reported, citing unnamed sources, that German officials are prepared to "accept a less detailed agreement on the UK's future economic and trade ties with the EU in a bid to get a Brexit deal done.

"Since the committee's previous meeting, there have been indications, most prominently in financial markets, of greater uncertainty about future developments in the withdrawal process.

"The committee judges that, were the economy to continue to develop broadly in line with the August Inflation Report projections, an ongoing tightening of monetary policy over the forecast period would be appropriate to return inflation sustainably to the 2% target at a conventional horizon.

"As before, these projections were conditioned on the expectation of a smooth adjustment to the average of a range of possible outcomes for the United Kingdom's eventual trading relationship with the European Union.

"At this meeting, the Committee judged that the current stance of monetary policy remained appropriate. Any future increases in Bank Rate are likely to be at a gradual pace and to a limited extent."

There was little reaction on the financial markets - the pound remaining static at just over $1.30 while it was also flat against the euro.

More follows...

Will house prices crash after Brexit? Experts answer your questions .
Will house prices crash after Brexit? Experts answer your questionsWe are a nation obsessed with property speculation. So it’s unsurprising that when it was reported last week that the Bank of England’s Governor Mark Carney had said ‘house prices would crash by a third in no-deal Brexit’ people (especially those who have bought recently at the top of the market) were rattled.

—   Share news in the SOC. Networks

Topical videos:

This is interesting!