BoE holds record-low rates despite recession threat

The Bank of England voted on Thursday to freeze its key interest rate at a record-low 0.50 percent and maintain the level of its quantitative easing cash stimulus, despite the threat of a triple-dip recession in Britain.

The central bank said in an unexpectedly long statement that its Monetary Policy Committee (MPC) had voted to maintain its emergency QE stimulus at £375 billion ($589 billion, 434 billion euros).

The BoE added that overall economic activity in Britain had been "broadly flat" over the past year, despite worries that the economy could be heading for the third recession in five years.

The stimulus has been used to try and help boost economic output, which unexpectedly shrank by 0.3 percent in the final quarter of 2012. However, the economy flatlined over the entire year with zero growth.

Across in Frankfurt, the European Central Bank also opted to maintain its main interest rate at a record-low level of 0.75 percent, amid ongoing debt strains in the crisis-hit eurozone.

"Over the past year, there has been considerable volatility in quarterly output growth," the Bank of England said in Thursday's statement.

"Looking through the influence of temporary factors, overall output appears to have been broadly flat. In large part that reflects sharp falls in particular sectors of the economy that are unlikely to be repeated in 2013.

"In contrast, the combined output of the manufacturing and services sectors has grown modestly. Business surveys suggest the pace of expansion is likely to remain muted in the near term," the BoE added.

The central bank said 12-month inflation would rise further in the near-term and could remain above its 2.0-percent target for the next two years. However, it was then forecast to return to "around" the target as price pressures fade.

Policymakers also mulled withdrawing QE stimulus, in order to pull inflation lower, but decided that it would risk endangering any recovery. QE can risk stoking inflation as it is tantamount to printing money.

"The Committee discussed the appropriate policy response to the combination of the weakness in the economy and the prospect of a further prolonged period of above-target inflation," it said, adding it was necessary to look beyond the period of above-target inflation.

"Attempting to bring inflation back to target sooner by removing the current policy stimulus more quickly than currently anticipated by financial markets would risk derailing the recovery and undershooting the inflation target in the medium term."

Thursday's decisions were in line with expectations and came as incoming BoE governor Mark Carney called for the bank to ready plans for a smooth eventual withdrawal of QE stimulus to avoid major disruption on markets.

Canadian central bank chief Carney -- who takes the helm from current BoE boss Mervyn King in July -- set out his views on QE before a group of cross-party lawmakers on parliament's Treasury Select Committee.

"The bank will need to design, implement and ultimately (manage an) exit from unconventional monetary policy measure in a manner that reinforces public confidence," Carney said in written testimony to the committee.

"The exit needs to be achieved without disrupting the gilts (bonds) market," he added ahead of the latest decision.

Quantitative easing (QE) involves a central bank creating cash to buy assets like government and corporate bonds, with the aim of boosting lending by retail banks and stimulating economic activity.

The BoE's main lending rate has stood at the record-low 0.50 percent since March 2009, when it also embarked upon its radical stimulus policy.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • US, Russia move closer to new Syria ceasefire after talks
    US, Russia move closer to new Syria ceasefire after talks AFP News - 1 hour 53 minutes ago

    Washington and Moscow made key steps towards agreeing a new ceasefire in Syria, but a final deal has not been reached, US Secretary of State John Kerry and his Russian counterpart said after talks Friday. Kerry and Russian Foreign Minister Sergei … More »

  • Business Highlights Associated Press - 2 hours 0 minutes ago

    ___ Yellen suggests rate hike is coming but offers no timetable Federal Reserve Chair Janet Yellen said Friday that the case for raising interest rates has strengthened in light of a solid job market and ... … More »

  • California governor signs bill banning coal-export funding Associated Press - 2 hours 19 minutes ago

    California Gov. Jerry Brown signed legislation Friday banning state transportation funding for new coal export terminals. The bill represents a victory for environmentalists as they campaign aggressively ... … More »

  • Stada shareholder AOC pushes through board reshuffle
    Stada shareholder AOC pushes through board reshuffle Reuters - 2 hours 22 minutes ago

    Stada (STAGn.DE) shareholder Active Ownership Capital (AOC) succeeded in convincing stock owners of the German drugmaker to vote off its supervisory board chairman in a voting marathon, but the activist investor fell short of its goal of replacing … More »

  • Dollar rises following Yellen remarks on rate hikes AFP - 3 hours ago

    The dollar rose Friday against the euro, the yen and the British pound following remarks from the US central bank favoring a near-term increase in interest rates. In a much-anticipated address, US Federal ... … More »

  • Global markets drift after Yellen speech
    Global markets drift after Yellen speech AFP News - 3 hours ago

    European and US equities markets were split on Friday after US Fed chief Janet Yellen suggested interest rates could rise in the near-term. In words carefully parsed by market watchers, Yellen said recent months had seen conditions in the US … More »

  • How the Dow Jones industrial average fared on Friday Associated Press - 4 hours ago

    Stocks ended on a weak note Friday after Federal Reserve officials said the case has strengthened for raising interest rates above the super-low levels that have helped fuel a seven-year bull market. Phone ... … More »

  • Stocks end mostly lower after Yellen speech
    Stocks end mostly lower after Yellen speech Associated Press - 4 hours ago

    Stocks ended mostly lower on Friday after Federal Reserve officials said the case has strengthened for raising interest rates above the super-low levels that have helped fuel a seven-year bull market. ... … More »

  • UN ready to help Colombia peace deal
    UN ready to help Colombia peace deal AFP News - 4 hours ago

    The UN Security Council on Friday warmly welcomed the historic peace deal reached between Colombia's government and FARC rebels, and pledged to help ensure the agreement takes hold. The council met behind closed doors two days after the Bogota … More »

  • Kerry, Lavrov hold marathon Syria talks
    Kerry, Lavrov hold marathon Syria talks AFP News - 4 hours ago

    US Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov held marathon talks in Geneva on Friday for an expected push towards resuming peace talks for war-ravaged Syria. Asked during a break how the meeting was proceeding, Lavrov … More »

  • US stocks mixed after Yellen says picture firming for rate hike AFP - 5 hours ago

    US stocks were mixed on Friday after Federal Reserve Chair Janet Yellen said the case for a rate hike is strengthening, raising expectations of a move by year-end. Trade was fairly quiet as Yellen also ... … More »

  • Markets Right Now: Stocks end mostly lower on Wall Street Associated Press - 5 hours ago

    The latest on developments in global financial markets (all times local): 4:00 p.m. Stocks ended mostly lower on Wall Street, giving up a modest gain from earlier in the day after Fed Chair Janet Yellen ... … More »

  • Morales sees 'conspiracy' in Bolivia minister's murder
    Morales sees 'conspiracy' in Bolivia minister's murder AFP News - 5 hours ago

    Bolivian President Evo Morales said Friday that his government is the victim of a "political conspiracy" after protesting miners allegedly kidnapped and beat to death a minister who tried to negotiate with them. Defense Minister Reymi Ferreira … More »

  • New law makes insurance companies find, pay beneficiaries Associated Press - 5 hours ago

    Insurance companies will be required to locate beneficiaries of unclaimed life insurance policies in Illinois and pay them money they're owed under legislation that Gov. Bruce Rauner signed into law on ... … More »

  • Deals of the day-Mergers and acquisitions Reuters - 5 hours ago

    (Adds Alere, Fiat Chrysler; updates Rackspace) Aug 26 (Reuters) - The following bids, mergers, acquisitions and disposals were reported by 2000 GMT on Friday: ** Cloud services provider Rackspace Hosting ... … More »

  • Oil prices edge up but OPEC giants downplay output limits AFP - 5 hours ago

    Oil prices edged higher Friday but the market remained weak as OPEC's key producers cast doubt on the possibility of cutting output. Iranian Oil Minister Bijan Zanganeh on Friday said his country wanted ... … More »

  • Canada, hoping to boost profile, pledges peacekeepers to UN
    Canada, hoping to boost profile, pledges peacekeepers to UN AFP News - 5 hours ago

    Canadian Prime Minister Justin Trudeau's government on Friday committed 600 troops and Can$450 million (US$350 million) over three years to United Nations peacekeeping operations around the world. Touted by the Liberal administration as a … More »

  • Grain lower, livestock mixed Associated Press - 5 hours ago

    Grain futures were lower Friday on the Chicago Board of Trade. Wheat for Sept. declined 17.75 cents at $3.8350 a bushel; Sept. corn lost 7.25 cents to 3.1625 a bushel; Sept. oats was fell 3.75 cents at ... … More »

  • Canada PM Trudeau to mount charm offensive in China: officials
    Canada PM Trudeau to mount charm offensive in China: officials AFP News - 5 hours ago

    Canadian Prime Minister Justin Trudeau will tour the Great Wall, shoot hoops with retired basketball star Yao Ming and meet with women entrepreneurs when he travels to China next week to bolster trade and diplomatic ties, his office said Friday. … More »

  • Oil steady in volatile session, down 2 percent for the week
    Oil steady in volatile session, down 2 percent for the week Reuters - 5 hours ago

    Oil prices were largely unchanged on Friday in a volatile session, as traders reacted to comments from Fed Chair Janet Yellen and reports of missile activity in Saudi Arabia. The market was taking its cues from the movement in the dollar, which has … More »

  • Dutch PM Mark Rutte announces third-term candidacy
    Dutch PM Mark Rutte announces third-term candidacy AFP News - 6 hours ago

    Prime Minister Mark Rutte announced Friday his candidacy to head the Dutch government for a third succesive term in office, as the countdown moves towards next year's parliamentary polls. "Rutte also informed his top party leadership about his … More »

  • Yellen's case for rate hike boosts dollar; stocks surrender gains
    Yellen's case for rate hike boosts dollar; stocks surrender gains Reuters - 7 hours ago

    U.S. equities gave up early gains on Friday, hurt by a surging U.S. dollar after Federal Reserve Chair Janet Yellen said that the case for raising U.S. interest rates has strengthened in recent months. European stocks advanced, however, while oil … More »

  • 11 Turkish police killed in PKK suicide bombing
    11 Turkish police killed in PKK suicide bombing AFP News - 7 hours ago

    The outlawed Kurdistan Workers' Party (PKK) on Friday claimed a suicide truck bombing on a police building in Turkey's southeast that killed 11 officers and wounded dozens more. The blast came two days after the Turkish army launched an offensive … More »

  • British economy escapes Brexit blow, for now
    British economy escapes Brexit blow, for now Reuters - 8 hours ago

    Britain's high streets are heaving with shoppers despite June's shock vote to leave the European Union, big companies have reported few signs of distress and some tabloid newspapers are even talking about a post-Brexit economic boom. The … More »

  • RUBBER-Tokyo futures prices after evening session Aug 26 Reuters - 8 hours ago

    Following are prices for Tokyo rubber futures at the end of the Tokyo market's evening session on Aug 2016. Contract Day Volume Evening Volume * Aug 154.1 13 153.9 3 * Sep 155.6 41 156.5 66 * Oct 151.8 ... … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.129+0.001+0.78%
    N21.SI
    1.855-0.040-2.11%
    MC0.SI
    2.84+0.02+0.71%
    C52.SI
    4.22-0.05-1.17%
    Z74.SI
    0.58-0.01-1.69%
    5TP.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.29+0.08+38.10%
    5VI.SI
    0.36+0.07+22.03%
    BPF.SI
    0.192+0.030+18.52%
    AYD.SI
    0.27+0.04+17.39%
    BLU.SI
    0.40+0.05+14.29%
    BFK.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.205-0.055-21.15%
    BTJ.SI
    0.34-0.06-15.00%
    BCD.SI
    0.39-0.06-13.33%
    AYB.SI
    0.31-0.04-11.43%
    5VP.SI
    0.24-0.02-9.43%
    BAZ.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3582+0.0051+0.38%
    USDSGD=X
    1.5196-0.0071-0.47%
    EURSGD=X
    1.7809-0.0034-0.19%
    GBPSGD=X
    74.6820+0.437+0.59%
    SGDJPY=X
    5.7047-0.0235-0.41%
    SGDHKD=X
    2.9663+0.0023+0.08%
    SGDMYR=X
    9,748.1885-70.3965-0.72%
    SGDIDR=X
    4.9062-0.0141-0.29%
    SGDCNY=X
    1.0263-0.0043-0.42%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,324.00-0.60-0.05%
    GCZ16.CMX
    18.63+0.14+0.76%
    SIU16.CMX
    95.80-0.72-0.74%
    ^XAU
    2.080.00+0.10%
    HGU16.CMX
    47.29-0.04-0.08%
    CLV16.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.24+0.08
    ^FVX
    1.63+0.06
    ^TNX
    2.30+0.03
    ^TYX