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BoE Super Thursday: no rush to hike yet

Thursday, August 06, 2015 - 01:39

The Bank of England has rolled three big key economic events into one 'Super Thursday' data announcement - including its interest rate decision. As David Pollard reports, the BoE appears to be in no rush to hike, at least for now.

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Super Thursday. Three separate events - the Quarterly Inflation Report, the rates decision and the minutes of that decision - unleashed on markets in one go. From what some see as governor Mark Carney's unwelcome data dump, this emerged. (SOUNDBITE) (English) MARK CARNEY, BANK OF ENGLAND GOVERNOR, SAYING: ''At its meeting yesterday, the MPC voted by a majority of 8-1 to maintain bank rate at 0.5 per cent ... And it reaffirmed its expectation that when bank rate rises occur, they can be expected to be limited and gradual.'' So, not two or more policymakers in favour of a rate hike, as many in the markets had been expecting. For Carney, though, the shock is inflation. The governor describing its downward trend this year as the most striking development in the UK. That said, inflation in two years' time will be back at the BoE's target rate, according to the latest projection. Output is seen blossoming - the latest forecast upwardly revised. Globally, there are risks. China one concern for the Bank, says Carney - and no doubt Greece. Low fuel prices, low to no inflation and high sterling keeping a lid on import prices whilst hindering exports - those are other reasons why the Bank won't hike for now. What could ultimately swing it the other way is, of course, the Fed. Super Thursday nowhere near as important as US payroll numbers on Friday, according to Mint Partners' Bill Blain. (SOUNDBITE) (English) BILL BLAIN, MARKET STRATEGIST, MINT PARTNERS, SAYING: If we get a much stronger-than-expected figure on Friday from the US payrolls, that brings forward the US interest rate hike, probably to September.'' In the meantime, QE has been held at its current level. UK bank rate left at half a per cent for a record 77th month.

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BoE Super Thursday: no rush to hike yet

Thursday, August 06, 2015 - 01:39