Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Defined Contribution East
    • 2023 ESG Investing
Breadcrumb
  1. Home
  2. ECONOMY
January 30, 2020 08:35 AM

Bank of England holds rates as Britain exits EU

Bloomberg
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Bloomberg
    The Bank of England kept interest rates on hold in Gov. Mark Carney's final meeting, waiting for more evidence of an economic rebound before supporting it with a cut.

    The Bank of England kept interest rates on hold in Gov. Mark Carney's final meeting, waiting for more evidence of an economic rebound before supporting it with a cut.

    Policymakers voted 7-2 to keep the benchmark at 0.75%, an unchanged split that belied investor expectations the decision was on a knife-edge. The committee noted that surveys of business activity have picked up "quite markedly in some cases" since Prime Minister Boris Johnson's election victory removed much of the near-term" uncertainty related to Brexit.

    Yet officials also signaled easing may be needed soon, cutting their GDP forecasts to the lowest level since the global financial crisis. They predicted that inflation will only return to target by the end of 2021.

    "This is less of a case of so far so good, and more a case of so far, good enough," Mr. Carney said in a news conference that followed the announcement.

    The pound traded 0.6% higher at $1.3096 at 12:52 p.m. London time. Investors are now betting on a rate cut late this year.

    The Bank of England's updated economic projections assume "an immediate but orderly move" to a new "deep free trade agreement" with the EU at the end of the year.

    If that doesn't happen, or the economy weakens anyway, the decision on a Bank of England response will fall to Mr. Carney's successor, Andrew Bailey. He'll take up his post in mid-March, the same month the government unveils a budget that ends almost a decade of austerity. That fiscal boost isn't included in the current forecasts.

    Policymakers said they saw signs of subdued inflationary pressure, and added that slower-than-expected supply growth will keep a lid on the expansion.

    "Policy may be need to reinforce the expected recovery in U.K. GDP growth should the more positive signals from recent indicators of global and domestic activity not be sustained or should indicators of domestic prices remain relatively weak," minutes of the meeting said.

    Officials also tweaked their language on the need for limited and gradual rate increases if growth comes in line with projections, saying just "some modest tightening" might be required.

    The Bank of England lowered forecasts for U.K. gross domestic product to a 0.75% gain this year, from 1.25% in November. Projections for 2021 and 2022 were both a quarter-point lower, while it cut its estimate for the fourth quarter of last year to zero. Based on money-market pricing for a rate cut this year, inflation is seen returning to the 2% target in 2021. Without the cut, the forecasts show it remaining below that mark.

    Michael Saunders and Jonathan Haskel maintained their push for an immediate rate cut, saying that indicators of expectations hadn't been a close guide to output and that downside risks to growth remained.

    The Bank of England sat out the global central bank easing of the past year as the European Central Bank restarted its bond buying. The Federal Reserve reduced borrowing costs three times in 2019. It kept its benchmark on hold Wednesday, albeit with dovish overtones. Weak data and dovish comments from officials at the start of the year prompted speculation that a Bank of England cut was coming. More recently, reports on business confidence and house prices suggested that Mr. Johnson's election had boosted sentiment.

    That left analysts and investors split. Markets were pricing in about 50% chance of a cut, while 17 of 61 economists also predicted a move. That may open Mr. Carney to further criticism over his communications after a lawmaker dubbed him an "unreliable boyfriend" near the start of his tenure.

    Related Articles
    Fed leaves main rate unchanged
    ECB begins yearlong review with few hints on changes to come
    Most investors uncertain about market prospects in 2020 – survey
    Recommended for You
    ONLINE_170719868_AR_0_ODETRWHHIVYZ.jpg
    U.S. economy expands 2.9% in Q4
    Larry Summers
    Larry Summers warns of 1970s crisis if central banks relent on rates
    Lael Brainard
    Fed will ‘stay the course' as inflation shows signs of cooling
    Research for Institutional Money Management
    Sponsored Content: Research for Institutional Money Management

    Reader Poll

    January 25, 2023
    SEE MORE POLLS >
    Sponsored
    White Papers
    The Future of Infrastructure: Building a Better Tomorrow
    Fulcrum Issues: Equity Returns and Inflation — Choose Your Own Adventure
    What Matters Most in Considering a Private Debt Strategy
    Why pursue direct lending in the core middle market?
    Research for Institutional Money Management
    Are Factors a Thing of the Past?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Defined Contribution East
      • 2023 ESG Investing