Bank Of England To Stay Pat On Rates As UK Braces For Hung Parliament
June 14 2017 - 4:33AM
RTTF2
The Bank of England is likely to keep its monetary policy
unchanged at the first policy meeting held after Prime Minister
Theresa May lost the Conservative parliamentary majority at the
June 8 general election.
Policymakers are expected to unanimously decide to hold the
interest rate at a record low 0.25 percent and the quantitative
easing at GBP 435 billion.
June's meeting will be Kristin Forbes' last. After demanding a
quarter point rate increase in the past two meetings, she is likely
to drop her call on political uncertainty.
The minutes of the meeting will be simultaneously published on
Thursday.
The bank reappointed its Chief Economist Andrew Haldane to the
Monetary Policy Committee for a further three-year term on
Monday.
And following her resignation, Charlotte Hogg's spot is still
vacant. The MPC currently consists of only eight members.
The general election has raised the uncertainty over the policy
and Brexit. Moreover, ongoing political uncertainty is consuming
precious negotiating time with the European Union.
Data on the economic front showed that inflation has accelerated
to a near four-year high of 2.9 percent in May. Average earnings
grew only 1.7 percent in the three months to April, signaling a
squeeze on consumers spending.
The statistical office had revised down its first quarter GDP
growth to 0.2 percent from 0.3 percent.
The economy is experiencing a slower growth and higher
inflation, a combination that makes policymakers' task difficult.
Governor Mark Carney is set to speak at the Mansion House on
Thursday evening.
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