Interest rate rise still in doubt in ‘robust’ United Kingdom economy

Fed Chair Janet Yellen reminded markets Wednesday night that a December hike was still a “live possibility” for the central bank.

But Mr Carney said at a press conference following an 8-1 vote by the bank’s Monetary Policy Committee (MPC) to keep the base rate on hold, that there was only a “reasonable expectation” there would be a rise within the coming year.

“The outlook for global growth has weakened” since the bank gave its previous forecasts in August, the BoE said in a statement.

Minutes of the MPC’s discussion this month showed there was “a wide spread of views” about the outlook for growth, inflation and the impact of the slowdown in emerging markets.

The Bank’s projections show that inflation in two years’ time may be slightly above its 2% target if the market expectations for rates are followed, which suggests they may need to rise before this. It fell a cent against the dollar, to just over 1.53. And while wage growth is rising, it is still not strong enough for inflation to hit the BoE’s 2 percent target in the next two to three years.

LONDON _ Mark Carney signaled the United Kingdom needs record- low interest rates for a while longer as China drags on the world economy.

Later today, the US Bureau for Labor Statistics is set to release the employment figures for October, and positive news may increase the temptation for a rate rise next month.

Within a barrage of forecasts and analysis published on what central-bank watchers have dubbed “Super Thursday”, the United Kingdom central bank presented a more cautious outlook for growth and inflation in the United Kingdom than it has in months, an outlook that implies borrowing costs are unlikely to rise at least until the second half of 2016.

At the same time it cut predictions for growth in the United Kingdom next year from 2.7 per cent to 2.5 per cent.

Core inflation, which excludes volatile food and energy prices, gained 1.11% year-on-year.

“Euro/dollar I think will go lower, and I think Carney was fearing it would go lower, hence his dovish language yesterday”, she added, suggesting that Mark Carney was entering the “currency war” by mentioning the exchange rate more often than usual in an attempt to talk it down.

The Bank of England has failed to raise interest rates again, pushing back forecasts for the first rise since 2009.

The Bank shaved its 2016 GDP growth forecast to 2.7%, down from 2.8% previously.

Low interest rates generally mean cheaper mortgages, personal loans and credit card bills. The Bank has said for several years that it wants to raise interest rates before it sells off any of the bonds it’s bought with its QE purchases, but what hasn’t been quite as clear is what the Bank will do with its earnings on those bonds.

It expects inflation will remain close to zero for the remainder of the year as a result of low oil prices and cheap imports.