Bank of England dampens prospects of early UK rate rise Forecasts for the first change in interest rates since 2009 have been pushed further into the future following the latest reports from the Bank of England. The Bank said that the outlook for global growth had weakened, which was depressing the risk of inflation. Economists think that indicates rates will not rise until the second quarter of next year and perhaps later. The Bank once again held UK interest rates at the record low of 0.5%. http://www.bbc.com/news/business-34733480
With so much changing of 'forward guidance' from the BoE would it be cynical to suggest that someone may not be comfortable with UK rate rises before that someone implements theirs ? Doubt that the fed will move yet awhile. Hope Sterling doesn't weaken too much. Christmas is coming the goose is getting fat ...............
Well it will be interesting to see, the potential for a rate rise close to the American potential rate rise is likely more important than anything else. If the states go first and we wait till the end of next year then Sterling will suffer as the dollar appreciates.
There are strong signals that the fed are looking to up the interest rates very soon. This could potentially hurt the £ especially given BoE signals that they have no intention for a rate hike until mid 2016 earliest. Lets hope they change their mind soon.
Coming soon: one dollar = one euro London (CNN Money) — The dollar could soon be worth as much as the euro. The two currencies are heading toward parity after Mario Draghi, the president of the European Central Bank, dropped yet another strong hint that he is about to pour more money into the European economy. Speaking at a banking congress in Frankfurt, Draghi said the ECB is ready to act fast to boost Europe's nonexistent inflation. "If we decide that the current trajectory of our policy is not sufficient to achieve our objective, we will do what we must to raise inflation as quickly as possible," he said. "We will do what we must" is the new "big bazooka." Draghi's dovish remarks sent the euro plunging. It lost 0.5% against the dollar, trading at around $1.07. Draghi has two options now. He can cut the already negative interest rates even deeper, or extend the bank's money-printing program. The ECB is currently buying 60 billion euros worth of bonds a month. http://cnnphilippines.com/business/2015/11/22/dollar-euro-parity-ecb.html
