Bank of England cuts growth forecast as Brexit bites

On their marks Unite members and workers in Carney masks picket the Bank’s head office in the City of London

The bank downgraded its growth projections for 2017 to 1.7 percent from 1.9 percent and that for 2018 to 1.6 percent from 1.7 percent.

At Berenberg, senior United Kingdom economist Pickering Kallum also saw Carney's comments as a warning rates could go up already in November. The pound is down almost 1% across the board after the BOE cut its growth forecasts for the United Kingdom, and Governor Mark Carney said that the UK's economic potential is now only 1.75% GDP growth per year. Its shares surged 9.7 percent after it returned to sales growth in the second quarter, helped by warm weather and an improvement in its online offering.

Erik Britton, director at Fathom and a former Bank of England economist, agreed that interest rates should rise.

When they last met in June, rate-setters on Threadneedle Street voted by a narrow 5-3 margin to keep interest rates at 0.25 percent.

Speculation over the likelihood of the Federal Reserve raising interest rates again before the end of the year could also put pressure on risk-sensitive Australian Dollar, with a strong United States non-farm payrolls report having the potential to send the GBP AUD exchange rate to a fresh high. All else being equal this ought to be supportive of sterling. It expects inflation, now at 2.6 per cent, to peak at 2.7 per cent in the final quarter of this year and to gradually fall to 2.2 per cent over the next three years, slightly above the Bank's official 2 per cent target.

In the previous MPC meeting three members had voted to raise interest rates, versus five who wanted no change.

"All things considered, today's decision, voting, inflation report and press conference has done little to clear things up and markets response to it would suggest just that".

But others say with more government unity around Brexit, and with signs that the "hard Brexit" markets fear could be averted, it made sense for the BoE to be moving towards tightening.

Donald Trump Signals Frustration with Generals After Lack of Progress in Afghanistan
Trump's predecessors also struggled with the task of stabilizing the country and bringing USA troops home. President Donald Trump recently proposed firing the top U.S.

USA jobless claims fell by 5,000 in the latest week, coming in near a 44-year low (http://www.marketwatch.com/story/us-jobless-claims-fall-by-5000-to-240000-2017-08-03).

Growth in the sector slowed to its lowest level since August 2016 as caution among clients dragged the purchasing managers' index (PMI) - an influential survey run by IHS Markit - down to 51.9 in July, sharply lower than the 54.8 recorded in June.

Sam Lynton-Brown, foreign exchange strategist at BNP Paribas in London, noted that short positions-bets that the greenback will decline further-are at a five-year extreme and that could expose investors holding shorts as the dollar could reverse its weak trend.

"We expect the BoE to remain dovish as the impact of the weaker pound becomes fully reflected in inflation data over the course of the next 12 months, allowing it to naturally drift back in line with global averages".

The euro rose slightly to $1.1881.

The dollar fell 0.5% against the yen, buying Yen110.14, compared with Yen110.74 on Wednesday.

It was also trading at 90 pence against the euro.

"While the last two quarters have certainly seen a dip in growth, overall economic performance has been better than expected since the referendum, particularly in light of some of the dire forecasts that preceded the vote".

Related News:

  • Bangladesh breaths easy as Australia ends pay dispute

    Bangladesh breaths easy as Australia ends pay dispute

    We will conduct a player vote in the next 24 hours to follow past precedent, but we expect that to come back positive", he added. The agreement was signed between Cricket Australia Chief Executive James Sutherland and players' union chief Alistair Nicholson.
    Gujarat Rajya Sabha polls

    Gujarat Rajya Sabha polls

    From January, 2014, biennial elections to Rajya Sabha covering all States and 25 bye-elections to Rajya Sabha have been held. Shivakumar is hosting the Congress MLAs at a resort near Bengaluru .
    Travellers angered by chaotic delays in major European airports

    Travellers angered by chaotic delays in major European airports

    But the new rules mean checks against a series of databases are now carried out on each passenger from non-Schengen countries. She wrote: "Mayhem at Barcelona airport, security queue stretching round whole airport and out exit!"
  • Census Shows a Changing Canada--and Mississauga

    Census Shows a Changing Canada--and Mississauga

    The number of overall English speakers was up from 2011, while the number of French speakers declined across Canada and in Quebec. More than 1 million children, or 19.2 per cent, were living in a single-parent family in 2016, up from 17.8 per cent in 2001.
    Venezuela: Maduro Postpones Parallel Legislature Takeover as Opposition Plans Major March

    Venezuela: Maduro Postpones Parallel Legislature Takeover as Opposition Plans Major March

    Maduro has blamed the country's woes on what he calls USA imperialism and its supporters inside Venezuela. But he did not specify whether his company's figures showed 1 million fewer, or 1 million more, voters.
    Luann & Tom D'Agostino Split After 7 Months of Marriage

    Luann & Tom D'Agostino Split After 7 Months of Marriage

    Page Six: A source tells us that D'Agostino, 50, who founded a printing business, quickly exhausted of the "reality TV lifestyle". This news comes just two weeks after de Lesseps and D'Agostino were spotted fighting in public.
  • The Secret Superstar trailer review

    The Secret Superstar trailer review

    In this film, Zaira pursues her dream of becoming a "superstar" but under the veil of a burkha and without revealing her name. Fans and movie-goers will be seeing a whole new avatar of Aamir Khan in his upcoming movie Secret Superstar .
    The Lion King: Chiwetel Ejiofor Reportedly in Talks to Star as Scar

    The Lion King: Chiwetel Ejiofor Reportedly in Talks to Star as Scar

    Together, they would form one star-studded cast for Disney and one that would be publicly appealing for a variety of audiences. This is not confirmed as of yet and there is no word right now about which other actors might be in the mix to voice Scar .
    Krispy Kreme and Reese's team up for the doughnut of our dreams

    Krispy Kreme and Reese's team up for the doughnut of our dreams

    Unlike the candy that inspired it, the Reese's doughnut is more peanut butter than chocolate, so it's not overwhelmingly sweet. It's not the first time the doughnut company has partnered with another brand to create a treat with a twist.
  • Edmond Fire Department releases video from moment 4.2 quake struck

    Edmond Fire Department releases video from moment 4.2 quake struck

    Central Oklahoma was hit with seven earthquakes in the span of 28 hours, leaving hundreds of people without electricity. In September 2016, a magnitude 5.8 earthquake-the state's largest ever recorded-struck near the town of Pawnee.
    Dukes of Hazzard's Tom Wopat Arrested After Groping Woman

    Dukes of Hazzard's Tom Wopat Arrested After Groping Woman

    A statement from the Waltham, Mass ., Police Department said Wopat, 65, was arrested in his auto on a warrant late Wednesday. According to TMZ .com, police were actively looking for Wopat, who was arrested after his vehicle was pulled over.
    'The Dark Tower': What you see is what you get

    'The Dark Tower': What you see is what you get

    The added problem with this one, however, is it's nowhere near close to being as good a standalone movie as most of those others. About halfway through the movie, Jack discovers that he shines, which means he has psychic abilities.


Most liked

Love Kills: 4 terrorists killed with a weakness for women
Later, the officer makes one last attempt by advicing Dujana to surrender but the officer does not get any response from Dujana . What can I do? "Sometimes I am ahead, sometimes you are ahead", an unidentified official quoted Dujana as saying, NDTV reported.

Qatar to purchase 7 navy ships from Italy amid Gulf crisis
The boycott has dramatically driven up costs to import food, medicine and likely even building materials that Qatar needs for extensive infrastructure projects.

Virginia man charged with holding girlfriend, 2 children captive
Police say the woman , 32, is Moore's girlfriend, and that the 8-year-old and 11-year old children are their kids. A father has been arrested for keeping a seriously-ill woman and two children captive for more than two years.