Is BoE Any Closer to Raising Interest Rates?

Sep 13 14:09 2017 Print This Article

What’s More Important to the BoE, Inflation or the Economy?

The Bank of England faces a dilemma when it meets on Thursday between getting inflation in check and supporting the flagging post-Brexit economy.

With the central bank significantly overshooting its 2% inflation target – CPI rose to 2.9% in August – the answer may appear simple but with policy makers divided, that is clearly not the case.

The depreciation of sterling has played a major role in the inflation rise over the last year and with the currency having bottomed last October, it is plausible that once the base effects drop out of the annual comparison, inflation will fall closer to target. But can policy makers rely on that?

Uncertainty Reigns

As we can see from recent voting, there is a growing belief that this cannot be relied upon. The important question therefore becomes, will enough policy makers decide they can’t rely on it before the data starts to correct itself?

Read More

About Article Author

Market Pulse

Established in 2006, MarketPulse is a free news site that provides full-time coverage of the world's largest financial markets, focusing on forex, commodities, and global indices research and analysis. Armed with a global team of securities analysts and strategists, Market Pulse provides timely, accurate, and informative research on major macroeconomic trends, technical analysis, and worldwide events that impact different asset classes and investors.

Related Items

DAX Under Pressure, Investors Eye Fed Minutes

The DAX index has posted losses in the Wednesday session. Currently, the index is trading at 12,428.50 down 0.48% since the Tuesday close. On the release front, German and Eurozone Manufacturing PMIs slowed in January. The German PMI dipped to 60.3, shy of the estimate of 60.6 points. It was a si ...

USD/CAD – Canadian Dollar Subdued Ahead of Fed Minutes

The Canadian dollar has recorded slight losses in the Tuesday session. Currently, USD/CAD is trading at 1.2669, up 0.16% on the day. On the release front, there are no Canadian releases on the schedule. In the US, the key event is the Federal Reserve minutes from the January meeting. We’ll also ...

EUR/USD – Euro Ticks Lower as German Manufacturing PMI Softens

The euro has posted small losses in the Wednesday session. Currently, the pair is trading at 1.2317, down 0.16% on the day. On the release front, German and Eurozone Manufacturing PMIs slowed in January. The German PMI dipped to 60.3, shy of the estimate of 60.6 points. It was a similar story with t ...

February 15, 2018

Most central banks cherish their independence; the Bank of Canada is not so defiant: The Bank of Canada is facing a series of emerging risks that could make monetary policy less effective when the next shock hits, deputy governor Lawrence Schembri warned in a speech Thursday to the Manitoba Associa ...

High Levels of Canadian Debt Worry BoC

A senior Bank of Canada official says the central bank is looking at how the high levels of household and public debt could pose a challenge to how it manages monetary policy. In a speech to the Manitoba Association for Business Economists, deputy governor Lawrence Schembri says high debt levels mea ...

Trend Behavior: Comparing US vs. Emerging Markets Stocks

Standard finance theory tells us to select weights for stocks and other asset classes based on market value. By that standard, emerging markets deserve a relatively light touch in portfolios. But this strikes some investors are misguided. As Frontera, a research shop, noted last year, “Emerging M ...

Dr. Jeffrey Kern: “Gold Stocks Will Break Dec 2016 Low”

    Dr. Jeffrey M. Kern has been an academic clinical psychologist at Texas A&M University and the University of Nevada – Las Vegas since 1979, specializing in the measurement and prediction of human behavior.   Born in New York City, Dr. Kern’s family suffered severe financial losses dur ...

Morning News: February 21, 2018

The Euro Zone Needs More Risk Sharing, But Fewer Risks U.K. Eyes Longer Brexit Transition and Asks EU to Talk Dates Venezuela Launches Virtual Currency, Hoping to Resuscitate Economy AT&T Names First Three Cities to Get Its Ultra-Fast 5G Network Walmart Stumbles in Shift to Web Selling Apple in Tal ...

Macron Inspires New UK Party Intent on Blocking Brexit

A new British party inspired by French President Emmanuel Macron’s movement launched a campaign on Monday to thwart Brexit by convincing MPs to block any EU withdrawal deal Prime Minister Theresa May can strike.Sandra Khadhouri, together with fellow Renew party members James Clarke and James Torra ...

BoE Hearing and Fed Minutes in Focus

US Futures Continue to Pare Last Week’s Gains US equity markets are expected to open in the red again on Wednesday, tracking losses in Europe as stocks continue to pare last week’s strong rebound. It’s been a relatively quiet start to the morning and the week, with the bank holiday in the US a ...