Smarter News Now
  • About Us
  • Privacy Policy
  • Terms & Conditions
  • Contact Us
  • Email Whitelisting
No Result
View All Result
  • Top News
  • Economy News
  • Forex News
  • Investing News
  • Stock News
  • Politics News
  • Editor’s Pick
  • Top News
  • Economy News
  • Forex News
  • Investing News
  • Stock News
  • Politics News
  • Editor’s Pick
No Result
View All Result
Smarter News Now
No Result
View All Result
Home Politics News

Bank of England hints at higher interest rate rises to come

by
July 6, 2022
in Politics News
0
Bank of England hints at higher interest rate rises to come
0
SHARES
8
VIEWS
Share on FacebookShare on Twitter

Borrowers may face bigger interest rate rises in the coming months as Bank of England officials prepare to speed up monetary tightening over stagnation fears.

Huw Pill, the central bank’s chief economist, said he was willing to adopt a “faster pace” of tightening than the Bank had implemented in the past few months.

The Bank has increased interest rates by 0.25 percentage points, or 25 basis points, in each of its past five meetings since December, when it began the process of monetary tightening. It is set to publish guidance on how it will wind down its asset holdings next month, as part of wider plans to withdraw stimulus and cool the economy and try to curb rampant inflation.

Prices rose by 9.1 per cent in the year to May, with inflation set to peak at more than 11 per cent in October, when energy bills rise, according to Bank forecasts.

The Bank’s monetary policy committee said in the minutes of its meeting last month that it was ready to act “forcefully” to tackle inflation if needed.

“The statement reflects both my willingness to adopt a faster pace of tightening than implemented thus far in this tightening cycle, while simultaneously emphasising the conditionality of any such change,” Pill said in a speech at a central banking conference hosted by King’s Business School in London today.

A rise of 0.5 percentage points would be unprecedented in the 25-year history of the committee. Michael Saunders, Catherine Mann and Jonathan Haskel voted to raise rates by such a margin in the last meeting, but were outvoted by the majority, including Pill, who opted to stick with a smaller rise. Pill has not voted for a 0.5-point rise in his two years on the committee.

Business BriefingIn-depth analysis and comment on the latest financial and economic news.One-click sign up.
The Federal Reserve raised rates by a margin of 0.75 percentage points last month for the first time since 1994, and the European Central Bank has indicated that it would be open to a 0.5-percentage point rise in September.

Pill, a former Goldman Sachs economist, said the Bank had to balance the risk of a long-term economic slowdown against the dangers arising from “uncomfortably high” inflation, which could become embedded in the expectations of business owners and members of the public.

“Risks to the economic outlook are two-sided,” he said. “The current squeeze on real income threatens to create slack and downside risks to inflation further out.”

Pill echoed the sentiment expressed by Jon Cunliffe, the Bank’s deputy governor for financial stability and a fellow committee member, who said earlier in the day that the Bank would do “whatever is necessary” to tackle inflation.

He told Today on Radio 4 that the shock the economy was experiencing was “very different” from the financial crisis of 2007-08, which “was followed by a very deep and very long recession”. This time, he said, “what we expect is that the cost of living squeeze will actually hit people’s spending and that will start to cool the economy, and we can see signs that the economy is already slowing”.

Cunliffe voted for a 0.25-point rate rise last month, and was the only committee member to vote to hold interest rates rather than raise them in the month after Russia’s invasion of Ukraine rocked global markets.

The Bank expects economic growth to be flat over the next year, he said, adding: “That’s a very different picture to the picture we saw 2009 to 2011. It’s a picture of a slow economy, where people can’t spend, they cut back on spending because of the cost of living squeeze.”


ShareTweetPin

Related Posts

Usain Bolt moves to trademark signature victory pose
Politics News

Usain Bolt moves to trademark signature victory pose

August 23, 2022
London to get new airport as Manston is cleared for take-off
Politics News

London to get new airport as Manston is cleared for take-off

August 23, 2022
Over 1,000 regional businesses are fending off cyber-attacks with police-led cyber resilience
Politics News

Over 1,000 regional businesses are fending off cyber-attacks with police-led cyber resilience

August 23, 2022
British Airways to cancel further flights up to the end of October
Politics News

British Airways to cancel further flights up to the end of October

August 23, 2022
Microsoft in trademark row with UK children’s reading firm Word Windows
Politics News

Microsoft in trademark row with UK children’s reading firm Word Windows

August 23, 2022
Crypto fraud revenues drop 65% following market meltdown
Politics News

Crypto fraud revenues drop 65% following market meltdown

August 23, 2022
Next Post
Three shots needed for full vaccination

Three shots needed for full vaccination

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Email Address *
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!
 

Recommended

TDF yields climb on tepid demand, rate hike bets

TDF yields climb on tepid demand, rate hike bets

August 17, 2022
How You Can Turn Plastic into Fuel?

How You Can Turn Plastic into Fuel?

July 24, 2022
Congress ratifies bill creating transportation safety board  

Congress ratifies bill creating transportation safety board  

June 1, 2022
SariSuki launches speedy grocery delivery service Supah 

SariSuki launches speedy grocery delivery service Supah 

June 22, 2022
Hanjin shipyard collapse leaves FIRB wary on future incentive grants

Hanjin shipyard collapse leaves FIRB wary on future incentive grants

June 7, 2022
Petrol prices: cost of filling family car hits £100 for the first time

Petrol prices: cost of filling family car hits £100 for the first time

June 10, 2022
  • About Us
  • Privacy Policy
  • Terms & Conditions
  • Contact Us
  • Email Whitelisting

Copyright © 2022 SmarterNewsNow.
All Rights Reserved.

Disclaimer: SmarterNewsNow.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

No Result
View All Result
  • About Us
  • Contact Us
  • Email Whitelisting
  • Home
  • Privacy Policy
  • Terms & Conditions
  • Thank You

Copyright © 2020 SmarterNewsNow. All Rights Reserved.