Bank Of England Keep Interest Rates On Hold
In what some were describing as "Super Thursday", forecasts for the first interest rate rise since 2009 have been delayed after the Bank Of England's latest announcement, earlier on today. The bank felt that the outlook for global growth had weakened which has put the UK in a weaker position to raise interest rates.
A number of analysts now think that this indicates there will not be a rate rise until at least the second quarter of next year, at the very earliest. Interest rates remain at their record low of 0.5%, after the Monetary Policy Committee, headed up by Bank Of England Governor, Mark Carney, voted 8-1 in favour of keeping interest rates the same.
In its quarterly inflation report, the Bank of England said that global growth has weakened since August, with emerging market economies being largely to blame. Carney though, did describe the British economy as "resilient" and "robust", but global economic weakness means that caution must be taken when approaching the long term outlook on inflation.
As the news was announced, GBPUSD dropped approximately 0.69% and was holding firm. Having traded down most of the day, the Bank Of England's decision actually sent the FTSE 100 into positive territory. Going forward, it will be the wider, global economy that Carney and his team will be keeping a close eye on, if domestic interest rates are to be changed.