Closing post
Time to recap….
The Bank of England has left interest rates on hold at 4.25%, though it signalled further cuts in the cost of borrowing later this year after “clearer evidence” of rising unemployment amid a slowing economy.
Six members of the Bank’s nine-member monetary policy committee (MPC) voted to keep rates on hold while three supported a reduction to 4%, to add to the four quarter-point cuts since last August.
The Bank’s governor, Andrew Bailey, said interest rates “remain on a gradual downward path” after “seeing signs of softening in the labour market”. He cautioned, however, that the world was “highly unpredictable” and it was difficult to predict when interest rates would next be reduced.
More here:
Chancellor Rachel Reeves backed the Bank, saying it has a difficult job.
Several economists predicted the Bank will cut rates, to 4%, in August, with two cuts expected by the end of the year.
Shares have dipped in London today, where the FTSE 100 index is down 19 points or 0.22% at 8823 points.
Oil has risen, as the Israel-Iran conflict entered its seventh day; Brent crude is up 1.7% at $78/barrel.
Here’s the rest of today’s news:
The Bank of England is “skipping” towards an August rate cut, reports analysts at Investec.
They explain:
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The main focus of the minutes appeared to be related to conditions in the labour market. Our takeaway was that the committee seems more convinced that the labour market is indeed loosening, with Bank staff predicting some ‘modest deterioration’ in indicators such as the unemployment rate over the coming months.
For the more dovish on the committee, that appeared to be enough to warrant lowering rates already. However, the more hawkish members seem to want to see more evidence that the looser labour market conditions are translating into lower price growth.
Updated
