Two MPC members cautious about rate rise

Bank of England's Carney says it may be appropriate to raise interest rates in coming months

If it had risen any further, Bank of England Governor Mark Carney would have to write to Treasury chief Philip Hammond explaining why inflation is more than a percentage point above the 2% target and what he and his colleagues at the central bank were going to do about it. The important thing is to focus on actions of bank's jurisdiction, Carney said, "we can contribute to price stability and financial stability".

Tenreyro, meanwhile, aired her opinion that she wasn't yet ready to vote for a rate hike.

The BoE surprised investors last month when it said most of its rate-setters expected to increase borrowing costs "in the coming months", even though Britain's economy is growing more slowly than other European economies and uncertainties about Brexit are mounting. "However that is very contingent on the data".

According to data released by the Office for National Statistics (ONS) on Tuesday (17 October), inflation as measured by the Consumer Price Index (CPI) rose 3% year-on-year last month, compared with the 2.9% growth recorded in September and in line with analysts' expectations.

Asked whether the MPC had enough interest rate "room" to deal with a possible recession, the Canadian responded: "Building a war chest in interest rate terms for a potential future shock isn't staying on point in terms of the inflation target, nor is it appropriate or necessary, given that policy can move quite nimbly if required".


"I think it's more likely than not that I will be writing on behalf of the MPC a letter to the chancellor", Carney said. She added that a premature rate hike could prove more costly to the economy than an early rate cut.

"Overall, today's data are consistent with our view that the Monetary Policy Committee will raise interest rates in November, but it won't be panicked into doing so by concerns about inflation".

Paul Hollingsworth at Capital Economics felt there will be a rate rise in November, with inflation not the principal driver.

"We expect BoE rate hike expectations to remain well supported into the November inflation report and they will continue to underpin GBP against Euro and USD", CACIB adds.

Paul Hollingsworth, senior UK Economist at Capital Economics, said he expected inflation to be back below 3% by the end of this year.

Related:

Comments

Latest news

NAFTA renegotiation talks will bleed into next year amid 'challenges'
Lighthizer said he has see no sign that Mexico and Canada are ready to make the major changes needed to the update pact. Canada and Mexico will reject the US's latest proposals for NAFTA but offer to continue negotiating, CNBC reported.

Samsung launches NB-IoT GPS smart tag
Samsung made it waterproof and dustproof along with a reliable battery backup that it can last for a week on a single charging. The device comes with a geo-fence feature that will notify the user's chosen smart devices when he or she approaches.

Sensex rises to 32643 points; Nifty crosses the 10000 mark
Domestic institutional investors (DIIs) bought shares worth a net Rs 1590.13 crore, as per provisional data. The wholesale inflation rate was at 1.36 per cent during Sepetember 2016.

Arsene Wenger blasts 'scandalous' penalty decision after Arsenal's loss at Watford
Silva's Watford side have had a surprisingly good start to the season as they now sit in fourth place on the Premier League table.

Donald Trump Accused Of 'Castrating' Rex Tillerson With Tweets
CNN host Jake Tapper repeatedly asked him about the allegation, but Tillerson insisted he would not play "games" by answering. Tillerson says in a television interview that Trump "has made clear to me that he wants this solved diplomatically".

Tillerson Just Saved $500 Million Withdrawing From UNESCO
The Reagan administration quit the organization in the 1980's, and the USA rejoined it only two decades later, under the George W. As for whether UNESCO members will change their stance on Palestine or make do without the USA , we'll find out in coming months.

Modi praises Kumar's commitment to Bihar; Launches projects worth crores
Prime Minister Narendra Modi on Saturday said Centre and Bihar Government will do everything possible for Bihar's growth. Modi said that time has changed and there is urgent need for education reform in India.

Amazon Embraces Teen Shoppers; With Parent's Permission
And more trusting parents can elect to sidestep the per-item approval process and simply set an overall maximum budget. On this page, there's now a new option to add a teen, as well as configure the settings associated with their account.

Trump Threatens NBC's TV License After Network Publishes Unfavorable Reports
Some members of Colorado's congressional delegation voiced concern Wednesday morning at Trump's tweet. During his presidential campaign, Trump said a number of alarming things about nuclear strikes .

Hamas must disarm, recognise Israel under Palestinian unity deal
Islamist movement Hamas is blacklisted as a terrorist organisation by the United States and the European Union. Hamas and Fatah agreed to transfer administration of Gaza to Union government at latest until December 1st.

Sylvester Stallone Announces He's Directing, Producing 'Creed' Sequel
Representatives for MGM, which produced the film, and Coogler have not yet responded to Vanity Fair's request for comment. Creed 2 may well sneak into cinemas by the end of next year too, with production set to begin in February 2018.

Mother leaves behind toddler in corn maze
He says the boy was cold and frightened but unhurt when someone else found him at the maze Monday evening. It wasn't until Tuesday morning that the mother realized that her child went missing.

'Serena will be back': Australian Open director backs Williams' return
Meanwhile, Tiley could not guarantee wayward Australian Bernard Tomic would get a start in the men's draw. Tiley, though, is confident that the Australian Open will welcome back some tennis heavyweights.

Investor's Alert (Volume Pattern in Focus): Wal-Mart Stores, Inc. (NYSE: WMT)
The company has also been on a shopping spree, snapping up smaller e-commerce players like ModCloth, Moosejaw, and Bonobos. Volume is the basic fuel of the market since stocks move up or down in price only when shares are trading hands.

Didier Deschamps Points To Lack Of Aggression In Slender France Win
The French are assured of at least a playoff place, with the best eight second-placed teams going through to the two-legged playoffs.

Other news