Bank chief economist surprises with interest-rate vote

Bank chief economist surprises with interest-rate vote

The Bank of England has held interest rate at 0.5% after the Monetary Policy Committee voted 6-3 in favour of no rise on Thursday.

"These members also felt that the benefits of waiting for additional information were limited", it showed. "If sterling continues to depreciate and wage increases lead to higher prices, there will be pressure for interest rates to rise higher and faster than markets now expect". It's first time Haldane has dissented since joining the panel in 2014.

The pound jumped by about a cent against the dollar following the Bank's decision, climbing back above the $1.32 level, as the possibility of an August rate rise appeared to increase.

If the economy is turning the corner, the idea of an August rate increase could be on the table.

Wage growth has been solid if unspectacular, and May retail sales were strong, reflecting sunny weather, a royal wedding and a partial easing of the inflation pressure that has squeezed British consumer demand since June 2016's Brexit vote.

Ed Monk, associate director for personal investing at Fidelity International, said: "A majority of economists expect a rise in August and there was nothing in the Bank's comment today to dissuade them". A putative May rate rise was thrown off course by an unusually harsh winter - and a possible underlying slowdown - that led to the economy nearly stagnating from January to March. However, there's no rush to raise rates this week given the high political and economic uncertainty'.

Little to celebrate as Saudi women see end to driving ban
After the order was issued to lift the driving ban, she wrote, "The way in which the ban was lifted seemed too simple to be real". And Mr Gasnier says that the "very difficult" conditions that blighted Saudi Arabia in 2017 have continued into this year.

Bank of England Governor Mark Carney said Treasury's GBP 1.2 billion capital injection announcement is a ground-breaking financial arrangement and this would make the balance sheet fit for objective and the future. The £5bn is the lowest figure for any May on record since 2005. Today's GBP/USD trading range is 1.310 - 1.3470.

'The accepted criteria for all sides is that this solution be convincing for markets and embed the creditworthiness of our country - the final act in restoring the credibility of Greece to be able to plan for the next day like any ordinary country.'
Unsurprisingly, the pound rallied from oversold conditions and continues to make gains today.

Trade concerns exist outside Britain too.

EURUSD - while above the May lows at 1.1520 as well as trend line support from the 2017 lows, we remain at risk for a rebound back towards the 1.1720/30 area, with resistance also at 1.1640.

If all banks are reported to have passed this year's tests, the USA dollar could rise further against the pound as United States dollar investors become more confident.

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