Bank of England

The Bank of England released the minutes of the Monetary Policy Committee meeting that was held on the 4th and 5th of June 2014. The key line from the BoE minutes is that the MPC members were surprised at the limited expectation from the market, that the MPC would raise rates before the end of the year. relatively low probability of 2014 bank rate rise priced in by markets "somewhat surprising Bank of England voted 9 – 0 to leave interest rates unchanged at 0.5…

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We have seen significant moves in cable over the last couple of days; the pound climbed over 200 points against the US dollar following Governor Mark Carney’s address at the annual Mansion House speech on Thursday evening. Carney gave his biggest hint yet that interest rates could rise before the turn of the year, saying ‘there’s already great speculation about the exact timing of the first rate hike in the UK and this decision is becoming more balanced. It could happ…

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The Office for National Statistics (ONS) released their Labour Market statistics for the UK at 9:30am on Wednesday morning. The headline 3-month unemployment rate for February - April 2014 beat expectations, being released at 6.6%, below expectations of 6.7% and the previous release of 6.8%. The UK government will be very pleased with these figures, reinforcing their plan to bring the UK economy back on track, however the opposition is likely to focus on the wage growth. Average earnings gro…

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UK Services Purchasing Managers Index (PMI) was released at 9:30 on Wednesday, slightly above expectations at 58.6, versus April’s 58.7. This is another strong print for the UK economy and reinforces the strength in the economic recovery. The services PMI accompanies strong survey reports from the manufacturing and construction sectors, pointing towards a relatively balanced recovery. A highlight of the statistical release was the service sector employment growth strengthened to…

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The UK Building Society, Nationwide released their monthly House Price Index in May, showing that prices continued to edge higher. In May prices grew by 0.7% and were up by 11.3% compared with May 2013. The average home in the UK now costs £186,512. House prices and Sterling House prices have become a contentious factor and the potential caveat for increasing base interest rates from the record low of 0.50%. The growth in property prices has fuelled concerns from analysts a…

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The Bank of England Minutes of the MPC meeting for the 7th and 8th of May were released at 9:30am today. The MPC voted 9 – 0 to leave interest rates unchanged at 0.50% and asset purchases on hold at £375bn. The minutes were more hawkish than previous, with the first hint of a change in tone. The key line in the release: The Committee would continue to refine its views as the economy evolved, and for some members the monetary policy decision was becoming more balanced.…

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CPI data released by the Office for National Statistics (ONS) this morning, was slightly higher than expected, and up on March. The release for April was 1.8%, with the expectations of 1.7% versus March’s 1.6%. This is still below the Bank of England’s 2% inflation target, but it was the first increase of inflation in 10 months. The ONS noted that the increase was primarily attributed to transport costs; notably air fares, sea fares and motor fuels. The release also highlig…

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The Bank of England’s Monetary Policy Committee (MPC) released their inflation report for May 2014. The dovish tone of the pre-prepared text, led to sterling trading new session lows in the FX market, as the optimism for an interest rate hike in the near term was dampened as Carney attempted to lower expectations. The BoE left their forecasts for both inflation and growth almost unchanged from the previous release, reinforcing the expectation for a rate hike will not be until 2015.…

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The Bank of England has the enviable position that the UK economy is growing and needs to time the exit of ultra-loose monetary policy. Interest rates have been at the record low (0.50%) for over 5 years, and the economy is in recovery mode. The majority of economists are pencilling in a rate rise for Q1/2 in 2015. How is the economy doing? Economic growth: 3% for 2014 and 2.4% in 2015 (Confederation of British Industries) 2.9% for 2014 and 2.7% in 201…

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The Markit/CIPS UK Manufacturing PMI for April released at 9:30am beat analysts expectations with a print of 57.3 for April vs 55.8 March. The manufacturing index rose to a 5 month high, registering one of the best readings over the last 3 years. This is a significant boost to the UK government, as the economic recovery begins to really take hold, though this puts further pressure on the Bank of England. Carney reiterated that increasing interest rates would happen when the slac…

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The Office for National Statistics (ONS) has released its first estimate for UK growth for the last 3 months at 0.8% slightly below analysts’ expectations of 0.9% for the quarter. The UK economy has grown by 3.1% over the last year, the ONS says. That's the strongest year-on-year change in GDP since the Q4 of 2007, after the near-collapse of Northern Rock.Though the figure is "disappointing” compared to expectations the key point to remember is that is shows the economy…

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The Office for National Statistics (ONS) released their March statistics for UK retail sales. The volume of sales edged up by 0.1% compared to February, a marginal improvement though the year-on-year figures were significantly higher, up 4.2% compared with March 2013. This difference has in part been attributed to the freezing cold weather that was experienced last year, which hampered sales. The headline for the release is that that the Non-Food stores saw the highest YoY increase (+9…

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The Bank of England released the minutes of the Monetary Policy Committee meeting for the 9th April this morning. The MPC voted unanimously (9-0) to leave interest rates at the record low level of 0.50% and the level of asset purchases unchanged at £375bn. Following the release in the FX markets sterling has been choppy as some would have hoped that a member of the MPC might have voted for a raise in rates. Cable is trading at a 5 year high with traders betting on the economic gr…

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The Office for National Statistics released the ILO Unemployment rate for the 3-months to February, which dropped to 6.9% from the previous reading of 7.1%. Employment was 239,000 higher than for September to November 2013 and 691,000 higher than a year earlier (ONS). The release shows a significant improvement in the unemployment rate, and poses a headache for the Bank of England. Mark Carney detailed under his forward guidance that the threshold for increasing interest rates would be the u…

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The Office for National Statistics released inflation data for March this morning, showing that the Consumer Price Index (CPI) had fallen since February; 1.7% to 1.6%. The may contributors to this fall were from the costs of transport and food, with a small impact from clothing and household goods. The full ONS CPI release for March The Retail Price Index (RPI) grew by 2.5% in the year ending Mach 2014, down from 2.7% in February. The macro release should be a positive for…

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