View more on these topics

Bank of England raises prospect of rate cut

The Bank of England may need to cut interest rates in order to prop up UK growth, chief economist Andy Haldane has warned.

In a speech to the Portadown Chamber of Commerce in Northern Ireland today, Haldane said the case for raising rates is “some way from being made”, before raising the prospect of a possible cut from the current level of 0.5 per cent.

He said: “With subdued world growth and prices, and a sharp appreciation of sterling whose effects in lowering imported prices have yet fully to pass-through, I am not as confident as I would like that one percentage point of additional nominal pick-up will be forthcoming over the next two years.

“In my view, the balance of risks to UK growth, and to UK inflation at the two-year horizon, is skewed squarely and significantly to the downside.

“Against that backdrop, the case for raising UK interest rates in the current environment is, for me, some way from being made. One reason not to do so is that, were the downside risks I have discussed materialise, there could be a need to loosen rather than tighten the monetary reins as a next step to support UK growth and return inflation to target.”

Earlier this month the Office for National Statistics confirmed UK inflation had returned to 0 per cent in August, having risen to 0.1 per cent the previous month.

Across the Atlantic US authorities yesterday voted against raising interest rates, keeping federal targets at 0-0.25 per cent.

Of the nine members of the Federal Open Market Committee, only Richmond Federal Reserve Bank president Jeffrey Lacker voted for an increase, arguing for a 25 basis point rise.

The vote means that US interest rates have now been kept at the same level since December 2008.



L&G staff vote for strike action over Kingswood closure

Staff at Legal & General’s doomed Kingswood office have voted to go on strike following discussions between Unite the union and staff. The union opened a consultative ballot for industrial action, which closed yesterday. There was a 68 per cent turnout for the ballot with 63 per cent of the total membership voting for action. […]

Most brokers want Osborne to scrap ‘unfair’ BTL tax relief cut

Nearly six in 10 mortgage professionals believe Chancellor George Osborne should reverse his proposed cuts to landlord tax relief. A Mortgage Strategy poll of 192 readers shows 58 per cent believe Osborne should scrap plans to limit the tax relief landlords can claim on property finance costs to the basic rate of income tax. The […]


Precise gives brokers direct access to 6-year fixes

Precise Mortgages has given brokers direct access to its range of six-year fixed rates, whereas previously they were only available through selected packagers. Lenders are required to stress test borrowers’ affordability to take into account the impact of expected future rate increases for loans of five years or less. However, the range, which starts at […]


News and expert analysis straight to your inbox

Sign up
  • Post a comment
  • Simon Murray 20th September 2015 at 12:41 am

    Shows how pointless the endless talk of interest rate rises is. There is no economic justification and the more you look at the mounting concerns about growth, the less likely it is going to happen anytime soon.

  • Simon Murray 18th September 2015 at 7:48 pm

    At last some sensible comment. There are massive storm clouds on the horizon with China’s economic slowdown starting to impact on future growth, the refugee crisis and neglible inflationary pressures. Who would be prepared to bet that there will be no rate rises in 2016?

  • Stuart Gregory 18th September 2015 at 5:16 pm

    It’ll be the usual – string it out as long as possible, leave behind absolute chaos – then leave to get a highly paid job elsewhere.

  • Freddie 18th September 2015 at 4:16 pm

    What was that about forward guidance plus all the other b/s ? Taxi for Mr Carney and I will pay for it !