Hamilton Crawford - BoE Holds Rates Amid Shock 5-3 Split.

Shanghai, China, July 6, 2017 (Newswire.com) - Hamilton Crawford: The Bank of England’s Monetary Policy Committee (MPC) has voted to leave interest rates at the current record low of 0.25% but the eight voting members were split 5-3 on the decision.

Three members voted to raise the cost of borrowing for the first time in eight years while five voted to leave rates unchanged. It is the first time since 2011 that so many MPC policymakers have voted to hike rates and the split reflects concerns over inflation which recently jumped from 2.7% in April to 2.9% in May, almost a full percentage point above the Bank of England’s official target.

The pound has been under pressure as we approach the one year anniversary of the historic "Leave" result of last year's June 26th EU referendum. Its weakness has created a slew of problems for the economy, not least of which are rising costs of essentials like food, clothing.

Hamilton Crawford, Analyst

The pace of growth in Europe’s second-largest economy has begun to ease with data showing a sharp decline in retail sales, slowing house price growth, slow wage growth, and rising inflation. The result of last week’s general election weakened sterling on the currency markets but today’s split decision gave the pound a boost with investors becoming more hopeful that an increase could be delivered at next month’s meeting. 

“The pound has been under pressure as we approach the one year anniversary of the historic 'Leave' result of last year’s June 26th EU referendum. Its weakness has created a slew of problems for the economy, not least of which are rising costs of essentials like food, clothing,” said a Hamilton Crawford analyst. 

The FTSE, the index of Britain’s 100 biggest companies fell sharply on concerns that some investors could be tempted to rotate out of stocks and into UK government securities (gilts) if a rate hike becomes more likely.

“Today’s split was highly unexpected. Markets largely expected the MPC to remain on the dovish side of sentiment because there appear to be so many headwinds facing the UK economy at the moment, particularly from the upcoming Brexit negotiations with the European Union and slowing economic growth. We certainly wouldn’t have expected the MPC to flirt with the notion of higher rates at a time like this,” said the Hamilton Crawford analyst.

Contact Info 
 Elite News-CN, Jingmi Rd, Chaoyang Qu, Beijing Shi,
​Chinainfo@elite-news-cn.com

Source: http://hamiltoncrawford.com