BoE’s Super Thursday: Interest Rates Remain Unchanged, GBP Dips
by
Andy Traveller
A dovish tone from the Bank of England means that a 2015 rate hike is unlikely. The deluge of data indicated inflation hit zero in June.
The Bank of England (BoE) has come out with its much anticipated “Super Thursday” press release. In the interests of transparency, the Bank has released a tranche of information, including the Monetary Policy Committee’s (MPC) rate decision, the voting count, minutes, inflation report and updated economic forecasts.
Investor sentiment was high leading up to the announcement, with a majority of traders opting to buy GBP. Yet with such a torrent of information, market Volatility was to be expected.
Following the announcement, a dampened inflation outlook saw the sterling fall from 1.5600 against the dollar over 100 pips to below 1.5500, whilst it moved lower against the euro with EUR/GBP declining to the 0.7000 level.
MPC Votes
In terms of the anticipated rates hike, there was not much of a surprise. On the back of weak inflation data, the MPC voted by a majority of 8-1 to maintain the Bank Rate at 0.5%.
The MPC voted by a majority of 8-1 to maintain the Bank Rate at 0.5%.
A dovish tone certainly dominated. The statement emphasised that the decision to raise the Bank Rate would proceed cautiously given the fragile gains of the economy.
This is somewhat in contrast to Governor Carney’s hawkish comments at a recent Inflation Report Hearings, held on Tuesday, July 14, in which he stated, “The point at which interest rates may begin to rise is moving closer given the performance of the economy.”
Amongst the deluge of data was the fact that only one MPC member dissented –Ian McCafferty broke ranks and voted for a rate rise. This being the first time this year that the MPC vote was not unanimous.
However, given that there was just one lone dissenter, a rate hike this year is unlikely, while a probable rate rise remains on the horizon for early 2016
Commenting on the MPC decision, John Longworth, Director General of the British Chambers of Commerce, stated: “The MPC has shown composure and sound judgement in keeping rates unchanged. It would have been imprudent to push through a rate rise at this moment when our economic recovery remains in need of care and encouragement. Rates will eventually have to rise and when they do it should be done slowly and steadily.”
Inflation
Of particular concern to the Bank was inflation, which dampened the tone vis-à-vis previous statements. Indeed, inflation fell back to zero in June, with low energy and oil prices being the key contributor, while domestic growth and unit labour costs remain weak.
The announcement stated, “The combined weakness in domestic costs and imported goods prices is evident in subdued core inflation, which on most measures is currently around 1%.”
Accordingly, the Committee revised its judgement regarding when the inflation target of 2% would be met, pushing it back to a two-year policy horizon.
When the Bank Rate does begin to rise, it is expected to do so more gradually and to a lower level than in recent cycles.
Minutes
A number of positive indicators were mentioned in favour of future hikes, including the fact that household spending is up on the back of low food and energy prices, while productivity, business confidence and wage growth remain strong.
However, the strong sterling of late, low levels of inflation, risks in the global economy and the UK’s current account deficit led the Bank to stress caution, noting, “When the Bank Rate does begin to rise, it is expected to do so more gradually and to a lower level than in recent cycles.”
The Bank of England (BoE) has come out with its much anticipated “Super Thursday” press release. In the interests of transparency, the Bank has released a tranche of information, including the Monetary Policy Committee’s (MPC) rate decision, the voting count, minutes, inflation report and updated economic forecasts.
Investor sentiment was high leading up to the announcement, with a majority of traders opting to buy GBP. Yet with such a torrent of information, market Volatility was to be expected.
Following the announcement, a dampened inflation outlook saw the sterling fall from 1.5600 against the dollar over 100 pips to below 1.5500, whilst it moved lower against the euro with EUR/GBP declining to the 0.7000 level.
MPC Votes
In terms of the anticipated rates hike, there was not much of a surprise. On the back of weak inflation data, the MPC voted by a majority of 8-1 to maintain the Bank Rate at 0.5%.
The MPC voted by a majority of 8-1 to maintain the Bank Rate at 0.5%.
A dovish tone certainly dominated. The statement emphasised that the decision to raise the Bank Rate would proceed cautiously given the fragile gains of the economy.
This is somewhat in contrast to Governor Carney’s hawkish comments at a recent Inflation Report Hearings, held on Tuesday, July 14, in which he stated, “The point at which interest rates may begin to rise is moving closer given the performance of the economy.”
Amongst the deluge of data was the fact that only one MPC member dissented –Ian McCafferty broke ranks and voted for a rate rise. This being the first time this year that the MPC vote was not unanimous.
However, given that there was just one lone dissenter, a rate hike this year is unlikely, while a probable rate rise remains on the horizon for early 2016
Commenting on the MPC decision, John Longworth, Director General of the British Chambers of Commerce, stated: “The MPC has shown composure and sound judgement in keeping rates unchanged. It would have been imprudent to push through a rate rise at this moment when our economic recovery remains in need of care and encouragement. Rates will eventually have to rise and when they do it should be done slowly and steadily.”
Inflation
Of particular concern to the Bank was inflation, which dampened the tone vis-à-vis previous statements. Indeed, inflation fell back to zero in June, with low energy and oil prices being the key contributor, while domestic growth and unit labour costs remain weak.
The announcement stated, “The combined weakness in domestic costs and imported goods prices is evident in subdued core inflation, which on most measures is currently around 1%.”
Accordingly, the Committee revised its judgement regarding when the inflation target of 2% would be met, pushing it back to a two-year policy horizon.
When the Bank Rate does begin to rise, it is expected to do so more gradually and to a lower level than in recent cycles.
Minutes
A number of positive indicators were mentioned in favour of future hikes, including the fact that household spending is up on the back of low food and energy prices, while productivity, business confidence and wage growth remain strong.
However, the strong sterling of late, low levels of inflation, risks in the global economy and the UK’s current account deficit led the Bank to stress caution, noting, “When the Bank Rate does begin to rise, it is expected to do so more gradually and to a lower level than in recent cycles.”
BGC Group Secures Backing from Global Banks for New $600M Trading Platform
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔