Bank of England holds interest rates and downgrades growth targets

An overview of the Royal Exchange, the Bank of England and the City of London on a cloudy day.

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London — The Bank of England on Thursday downgraded its economic growth forecast for the third quarter of this year without changing its monetary policy.

UK economic growth slowed unexpectedly in July, boosting consumer prices The largest increase from the previous month since the record began in January 1997..

Some BOE watchers urged inflation readings to lower expectations of interest rate hikes by 0.1% from record early next year. Meanwhile, Bank of America economists believe that central banks could put pressure on rising interest rates in February if inflationary pressures continue.

Sterling Immediately after the central bank’s interest rate was set, it rose 0.4% to $ 1.3676, holding back losses early in the week.

The UK economy expanded by just 0.1% in July from the previous month. According to data from the National Bureau of Statistics.. It was the sixth straight month of growth as the Covid-19 restrictions were lifted, but the increase was significantly lower than expected, much slower than the 1% increase in the previous month.

According to ONS, the UK economy is 2.1% below the pre-Covid pandemic level.

The numbers urged BOE Governor Andrew Bailey to suggest that Britain is seeing a “some flattening” of economic recovery from the coronavirus pandemic.

Bailey spoke with lawmakers earlier this month to reaffirm his view that the recent surge in inflation will not last. The Bank of England warned in August that inflation could reach 4%, double the target level, before inflation returns to nearly 2%.

The UK consumer price index surged 3.2% in the 12 months to August, according to data compiled by ONS last week. A Reuters poll predicted an August measurement of 2.9%.

The index surged 2.0% each year in July.

Bank of England holds interest rates and downgrades growth targets

Source link Bank of England holds interest rates and downgrades growth targets

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