BOE Waits for Brexit Clarity as Forecasts Hint at Faster Hikes
Thursday, 1 November 2018 19:24 WIB | FISCAL & MONETARY |BOE

The Bank of England hinted there may be a need for faster rate increases in the coming years in a report dominated by uncertainty over Brexit.

The Monetary Policy Committee, led by Governor Mark Carney, said the economy may start running hot earlier than previously anticipated as wage growth improves and domestic costs build. It sees the inflation rate staying above its 2 percent goal for the next two years. Interest rates were left unchanged on Thursday.

The slightly hawkish bias compared with August is tempered by the fact that the forecasts are based on an assumption for a smooth Brexit that may not come to pass. It said the exit deal with the EU remains the biggest factor when it comes to the economy and monetary policy.

œThe monetary policy response to Brexit, whatever form takes, will not be automatic and could be in either direction, the bank said in its quarterly Inflation Report. While the exact impact of Brexit œcannot be determined in advance, under all circumstances, the MPC will respond to any material change in the outlook.

In a sign of how Brexit is affecting the economy, the BOE slashed its forecast for business investment and sees stagnation this year. It also lowered its 2019 economic growth outlook slightly, to 1.7 percent. On the global economy, it said growth has become more uneven, and downside risks have increased.

The U.K. predictions, including the outlook for faster inflation, are based on market measures indicating that the BOE will deliver about three more quarter-point rate hikes by late 2021, more than were foreseen a few months ago.

But with its forecasts zero-weighted for a disorderly Brexit, there™s an increasing chance they will ultimately have to be thrown out.

The BOE assumes a relatively stable path for the pound over the next three years, a crucial determinant for inflation. At the same time, it said the currency will probably rise if there™s a Brexit deal that keeps a close relationship with the EU, or drop if the U.K. crashes out without new trade arrangements.

The BOE also noted that the situation is now different from just after the 2016 referendum, when inflation was below target and demand was weaker than supply. At the time, the bank unleashed a new round of stimulus to support growth, but it notes that there™s little it can do to offset supply shocks.

The minutes of the meeting reiterated that limited and gradual rate increases will probably be needed over the next few years. The MPC voted 9-0 at this decision to hold the benchmark interest rate at 0.75 percent, as predicted by all 56 economists in a Bloomberg survey.

Source : Bloomberg

RELATED NEWS

BOJ keeps policy unchanged, modifies guidance on interest rates
Thursday, 25 April 2019 10:55 WIB

Pada hari Kamis, Bank of Japan (BOJ) menyimpulkan pertemuan peninjauan kebijakan moneter 2 hari di bulan April dan tidak membuat perubahan pada pengaturan kebijakan moneternya, mempertahankan suku bunga pada -10bps sambil mempertahankan target produksi JGB 10 tahun di 0,00%. Pemungutan suara BOJ ad...

Fed scaled back interest-rate forecast due to unease about economy, soft inflation, FOMC minutes show
Thursday, 11 April 2019 01:43 WIB

Keputusan Federal Reserve pada bulan Maret untuk menahan menaikkan suku bunga tahun ini didorong oleh kegelisahan atas AS serta ekonomi global dan secara mengejutkan menahan inflasi, menurut risalah dari pertemuan bank sentral. Bulan lalu The Fed membuang rencana sebelumnya untuk menaikkan suku bun...

Draghi Warns Global Risks Still Battering Euro-Area Economy
Wednesday, 10 April 2019 20:26 WIB

Presiden Bank Sentral Eropa Mario Draghi memperingatkan bahwa ekonomi kawasan euro menghadapi risiko yang besar termasuk Brexit dan bahaya bahwa proteksionisme perdagangan dapat mengurangi kepercayaan. Draghi mengatakan angka-angka baru-baru ini mengkonfirmasi "momentum pertumbuhan yang melambat" s...

ECB Keeps Policy, Rate Guidance Unchanged
Wednesday, 10 April 2019 19:01 WIB

Bank Sentral Eropa (ECB) mempertahankan kebijakannya tidak berubah seperti yang diharapkan pada hari Rabu, mempertahankan suku bunga pada rekor terendah dan menjaga pedoman untuk suku bunga stabil tahun ini meskipun terjadi perlambatan tajam dalam pertumbuhan ekonomi. Dengan ekonomi dan inflasi ked...

Bank of England leaves policy rate unchanged at 0.75% with unanimous vote as expected
Thursday, 21 March 2019 19:14 WIB

Dalam keputusan yang diperkirakan secara luas, Komite Kebijakan Moneter Bank of England mempertahankan suku bunga kebijakan tidak berubah di 0,75% dengan suara bulat. Fasilitas pembelian aset juga tetap stabil di €435 miliar. Di bawah ini adalah beberapa poin-poin penting dari pernyataan kebijakan...

ANOTHER NEWS
Weak Industrial Earnings Drag Wall Street Lower
Thursday, 25 April 2019 23:36 WIB U.S. stocks were pulled lower on Thursday by downbeat earnings from industrial companies, including 3M, although strong results from marquee names Facebook and Microsoft kept the tech-heavy Nasdaq afloat. 3M Co shares tumbled 11.3% after the...

DISCLAIMER

Seluruh materi atau konten yang tersaji di dalam website ini hanya bersifat informatif saja, dan tidak dimaksudkan sebagai pegangan serta keputusan dalam investasi atau jenis transaksi lainnya. Kami tidak bertanggung jawab atas segala akibat yang timbul dari penyajian konten tersebut. Semua pihak yang mengunjungi website ini harus membaca Terms of Service (Syarat dan Ketentuan Layanan) terlebih dahulu dan dihimbau untuk melakukan analisis secara independen serta memperoleh saran dari para ahli dibidangnya.