Bank Of England Retains Record Low Rates In Split Vote

That contrasts with action from other central banks.

Janet Yellen, who chairs the Fed, told a Congressional hearing last week, “When we put it all together we’re still seeing an overall picture of slightly above trend growth, ongoing improvements in the labour market”.

The analysts concluded, however, that while “global forces have some impact on domestic wage growth” it doesn’t change the fact that if slack in the US labor market tightens wages will rise for USA workers. This is the sixth time that the central bank has frozen the rate since June, when it announced a surprise cut of 0.25 basis points, citing the need to boost domestic consumption after the outbreak of Middle East respiratory syndrome here.

Investors expect the BoE to raise interest rates in the United Kingdom late next year or early 2017, according to interest-rate derivatives that track the BoE’s benchmark rate.

Falling oil prices will hold down inflation, the Bank of England has warned, signalling that its interest rates could stay low for longer.

It’s surprising the pound weakened so much after the decision because officials barely changed their outlook, said Adam Cole, Royal Bank of Canada’s head of global foreign-exchange strategy.

The Bank signalled in its quarterly inflation report last month that an interest rate rise in the United Kingdom may still not come for another year, while monetary policy in the U.S. and Europe is moving in completely opposite directions.

But when stock markets crashed at the end of August and in September, the prospect of an interest rate was yet again pushed into the distance.

The BOK forecasts 2.7 percent growth for 2015, down from 3.3 percent past year, and 3.2 percent growth in 2016.

“Since its last policy meeting, oil prices have renewed their descent, while inflation developments generally have remained very benign”, noted Lloyds economist Adam Chester. With inflation at minus 0.1 percent, there’s little pressure to act.

Mr Saunders said: “There is not even a hint that any of the majority are close to joining Mr McCafferty in voting for a hike”.

Economists predict the panel will keep the key rate unchanged until well into next year.

Inflation may turn positive in November, officials said, however “core inflation remains subdued”, the the minutes showed.

“One element of our bearish sterling view is that having taken hikes off the table for the first half of 2016, the committee may lose the chance in the second”, said Deutsche Bank strategist Oliver Harvey.

Jan Hatzius, the influential chief economist at Goldman Sachs, thinks the Fed will hike once per quarter.