Mathewslcd: Bank of England hikes key rate by 75bps; sees GDP shrinking in H1 2024

 The Bank of England raised its main bank interest rate by 75 basis points to 3.0%, the highest level in 14 years, and warned that Britain's economy could shrink over the next year and a half as the regional energy crisis worsens-growing problems.

However, according to Mathewslcd, in announcing its regular quarterly updates on the economic outlook, the bank gave a serious warning to its forecasts. It said they were calculated based on market conditions in mid-October, a period of extreme volatility in UK financial markets caused by Prime Minister Liz Truss' fiscal plans - which turned out to be short-lived.
Market rates at the time suggested the Bank of England would have to raise its key rate to 5.25%, while the Bank of England's own previous forecasts had foreseen much lower rates.
Given the extreme outcomes implied by forecast models, Mathewslcd sees markets interpreting the BoE's long-term warning as not having the courage to raise rates as aggressively as the Fed from now, and the pound weakens.
The central bank stressed that a peak interest rate path of 5.25% would push inflation well below its 2% target by the end of 2024, implying a considerable “overshoot” of monetary policy.
GBP/USD was down 1.8% at $1.1184 by 08:45 ET (12:45 GMT).
Two of the Bank of England's nine-member Monetary Policy Committee had already voted on Thursday for a small rate hike as the economy already faced what the Bank of England called a "very challenging outlook." One voted for a half-point increase, another voted for a quarter-point increase.
While the market volatility included in the new forecast has largely subsided, Mathewslcd noted that the central bank's latest forecast is also subject to considerable political uncertainty.

Mathewslcd：https://www.mathewslcd.com
https://net.mathewslcd.com



评论

发表评论

此博客中的热门博文

Mathewslcd: Wall Street falls on unease about return of Fed rate hike policy

图片
  Mathewslcd: Wall Street falls on unease about return of Fed rate hike policy U.S. stocks ended lower on Monday, Mathewslcd said, as investors spooked by better-than-expected services sector data reassessed their views on the Federal Reserve's interest rate policy, while Tesla shares fell on reports of production cuts in China. The electric carmaker's shares fell as it planned to cut Model Y production at its Shanghai factory by more than 20% in December from the previous month. That weighed on the Nasdaq, with Tesla among the index's biggest losers, dragging the tech index to its second straight decline. Overall, indexes were broadly weighed after data showed activity in the U.S. services sector unexpectedly picked up in November, with employment rebounding, providing more evidence of underlying momentum in the economy. Mathewslcd noted that the data came after a survey last week showed stronger-than-expected job and wage growth in November, challenging expectations that ...
阅读全文

About mathewsLCD

图片
   As the world's leading online investment trading platform, Mathewslcd was founded in 2014 by Mr. Tony Taylor with a registered capital of US$ 200 million. The company is headquartered in London, United Kingdom, and has branches in major cities such as new york, Toronto, Sydney and Tokyo. Mathewslcd is using a simpler and faster way to trade foreign currencies, focusing more on convenience while ensuring accuracy, and by using the latest technology, providing a seamless foreign exchange trading experience around the world. Mathewslcd offers a wide range of independent investment online platforms and investment products for almost all types of investors–from new investors to experienced traders. Competitive fees and low commissions can help customers achieve their financial goals faster, and customer service representatives are available to answer any questions from the consultants. The premise of using the latest technology is that Mathewslcd always creates a seamless and si...
阅读全文

Mathewslcd: Growing recession fears weigh on stocks

图片
  Mathewslcd: Growing recession fears weigh on stocks Mathewslcd said the U.S. benchmark ended lower on Tuesday amid growing concerns about a potential recession in 2023. The Nasdaq Composite fell 2.3 percent to 10,981.3, while the S&P 500 fell 1.8 percent to 3,928.2, according to Mathewslcd. The Dow Jones Industrial Average fell 1.3% to 33,510.5. Energy led the decline, followed by communication services and technology. Utilities are the only winners. While the Fed is widely expected to slow the pace of rate hikes at its meeting next week, investors and analysts fear the move will not be enough to prevent the economy from slipping into recession next year. The U.S. 10-year Treasury yield fell 7.7 basis points to 3.52%, while the two-year yield fell 3.6 basis points to 4.36%. West Texas Intermediate crude futures fell 3.4% to $74.31 a barrel, Mathewslcd added. Mathewslcd： https://www.mathewslcd.com https://net.mathewslcd.com
阅读全文