Bank of England set to keep UK interest rates on hold despite paltry economic growth | CPT PPP Coverage
Cryptopolytech (CPT) Public Press Pass (PPP)
News of the Day COVERAGE
200000048 – World Newser
•| #World |•| #Online |•| #Media |•| #Outlet |
View more Headlines & Breaking News here, as covered by cryptopolytech.com
Bank of England set to keep UK interest rates on hold despite paltry economic growth appeared on www.independent.co.uk by Pan Pylas.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it’s investigating the financials of Elon Musk’s pro-Trump PAC or producing our latest documentary, ‘The A Word’, which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.
The U.K.’s central bank is set to keep interest rates on hold later Thursday as inflation has moved further above its target rate, even though the British economy is flatlining at best.
The nine-member Monetary Policy Committee is widely expected to keep the bank’s main interest rate unchanged at 4.75% in the wake of figures showing inflation rising to 2.6%, further above the target of 2%.
With price pressures elevated in the crucial services sector, which accounts for around 80% of the U.K. economy, and wages strong, there are few indications that inflation will get back towards the target anytime soon. As a result, the rate-setting panel, which last cut its key rate in November, is set to take a cautious stance, as lower borrowing rates could stoke inflation.
That’s a disappointment for many struggling sectors in the U.K. economy that would be helped by lower interest rates in an environment of paltry growth — in fact the British economy has contracted for two months in a row.
“Persistent price pressures will prevent the Bank of England from responding to flat output and falling employment by cutting interest rates,” said Andrew Wishart, an economist at Berenberg Bank.
Few economists think interest rates will drop dramatically in 2025 either. It’s a similar picture in the U.S., where the Federal Reserve reined in expectations Wednesday of reductions next year after its latest rate cut.
Critics argue that the new Labour government’s first budget in October has both elevated inflation pressures while also damping down on growth. A big increase in business taxes may see firms try to offset the additional costs by raising prices or cutting down on hiring. The government argues that it needed to raise taxes to shore up public finances and inject money into cash-starved public services.
Still, inflation in the U.K. and across the world is far lower than it was a couple of years ago, partly because central banks dramatically increased borrowing costs from near zero during the coronavirus pandemic when prices started to shoot up, first as a result of supply chain issues and then because of Russia’s full-scale invasion of Ukraine which pushed up energy costs.
As inflation rates have fallen from multidecade highs, the central banks have started cutting interest rates, though few, if any, economists think that rates will fall back to the super-low levels that persisted in the years after the global financial crisis of 2008-2009.
FEATURED ‘News of the Day’, as reported by public domain newswires.
View ALL Headlines & Breaking News here.
Source Information (if available)
This article originally appeared on www.independent.co.uk by Pan Pylas – sharing via newswires in the public domain, repeatedly. News articles have become eerily similar to manufacturer descriptions.
We will happily entertain any content removal requests, simply reach out to us. In the interim, please perform due diligence and place any content you deem “privileged” behind a subscription and/or paywall.
CPT (CryptoPolyTech) PPP (Public Press Pass) Coverage features stories and headlines you may not otherwise see due to the manipulation of mass media.
First to share? If share image does not populate, please close the share box & re-open or reload page to load the image, Thanks!