MPC keeps policy unchanged, as expected

As expected, the MPC voted by eight votes to one to leave rates unchanged and by nine votes to nil to maintain its money-printing programme at its current level. Another $26 billion in six-month bills was auctioned at a discount rate of 0.535 per cent, up from 0.415 per cent last week.

The rise in U.S. rates would be the first since 2006 and there are fears it will trigger market disruption, also coming at a time when the global economy and China’s growth have been slowing.

Governor Mark Carney and other Monetary Policy Committee members said the “material news” in the month since they had last met was that oil prices had “fallen markedly again”, which raised the likelihood of inflation staying subdued.

The BoE’s Monetary Policy Committee (Mpercent) kept its key rate at 0.5 percent, where it has stood since March 2009, it said in minutes of the latest monthly gathering.

Bank of England (BOE) seriously scaled back its inflation and well as rate hike expectations over last meeting or so.

Hungary’s central bank is all but certain to keep its record-low base rate on hold, a Reuters poll showed on Wednesday.

The rate setters noted “existing uncertainties mostly referring to the global environment, primarily the uncertain reaction of market participants to an expected increase of interest rate by the Fed and its impact on commodities and financial markets”, the bank said in the statement.

We have reported that ING are forecasting the pound to tick higher in 2016 as they expect the Bank to ultimately start ignoring the currency’s role in holding back inflation.

Regarding concerns that the government’s one-time consumption-boosting measures may trigger a consumption cliff next year, Lee said the chances of this were slim, citing improvement in the average purchasing power caused by by steady wage growth and low oil prices.

Expectations for when the first United Kingdom rate rise will eventually come vary significantly, although most economists believe a hike will be made before 2017 – at odds with forecasts in the Bank’s own November inflation report. The overall tone of the minutes suggested the Bank was at least a few months away from any move to start hiking rates. Brazil is experiencing its worst recession in decades and previous rate hikes have not prevented a rise in inflation, which in October reached a 12-year high of 9.93%. The 10-year gilt yield fell one basis point, or 0.01 percentage point, to 1.87 per cent, after sliding to 1.82 per cent. The 2 per cent security due in September 2025 rose 0.09, or 90 pence per £1000 face amount, to 101.19.