Thursday, March 23, 2006
Loans rates hold steady following UK Budget report
Stephen Nickell remained the lone voice on the Bank of England’s Monetary Policy Committee calling for a rate cut, as the rate-setting body voted 8-1 to leave rates unchanged at 4.50 percent as expected.
This was the fourth month running that Nickell, who’s term in the MPC is due to end on 31st of May, called for a rate cut. The majority disagreed, however, arguing that it was appropriate to leave rates unchanged given that the outlook was, on balance, for continued growth near trend and inflation close to target. In the end, the minutes suggest that UK rates will stay put for the time being unless the economic backdrop changes significantly one way or another.
Brown said the economy would grow by 2.0-2.5 percent this year, unchanged from the estimate he gave in December’s pre-budget report. He added growth would then pick up to 2.75-3.25 percent in 2007. Chancellor Gordon Brown took centre stage to deliver the country’s annual budget yesterday and left David Cameron, his likely rival at the next election, looking short on substance. Confounding his hard-faced image, Brown cracked jokes in a confident speech setting out his plan for the country’s future.
The budget debate was the first time Brown had squared up to Cameron in parliament. The conservative leader attacked Brown in a short feisty speech – branding him an obstacle to change and accusing him of living in the past.
Loans rates hold steady following UK Budget report
Stephen Nickell remained the lone voice on the Bank of England’s Monetary Policy Committee calling for a rate cut, as the rate-setting body voted 8-1 to leave rates unchanged at 4.50 percent as expected.
This was the fourth month running that Nickell, who’s term in the MPC is due to end on 31st of May, called for a rate cut. The majority disagreed, however, arguing that it was appropriate to leave rates unchanged given that the outlook was, on balance, for continued growth near trend and inflation close to target. In the end, the minutes suggest that UK rates will stay put for the time being unless the economic backdrop changes significantly one way or another.
Brown said the economy would grow by 2.0-2.5 percent this year, unchanged from the estimate he gave in December’s pre-budget report. He added growth would then pick up to 2.75-3.25 percent in 2007. Chancellor Gordon Brown took centre stage to deliver the country’s annual budget yesterday and left David Cameron, his likely rival at the next election, looking short on substance. Confounding his hard-faced image, Brown cracked jokes in a confident speech setting out his plan for the country’s future.
The budget debate was the first time Brown had squared up to Cameron in parliament. The conservative leader attacked Brown in a short feisty speech – branding him an obstacle to change and accusing him of living in the past.
Wednesday, March 22, 2006
Bad news for Gordon Brown ahead of the Budget Report
UK public finances deteriorated in February following January’s record surplus it was announced this week. Chancellor of the Exchequer Gordon Brown received unwelcome news ahead of tomorrow’s budget report as worse-than-expected public finances figures for February look set to dampen hopes that he may be able to achieve his forecasts for the current fiscal year, figures showed.
The figure comes well below expectations of around GBP0.7bln at GBP2.3bln - the highest borrowing for February since 1997.
US Federal Reserve Chairman Ben Bernanke, in his first public foray on Wall Street, offered conflicting signals on interest rates but said the economy should keep growing at a brisk pace. Bernanke’s speech was his last scheduled appearance before the Fed meets on March 27-28 to decide whether to increase interest rates for a 15th straight time by a quarter-percentage point, to 4.75 percent.
The Fed chairman’s optimistic outlook for the economy, and his view that homeowners can absorb a slowdown in the housing market without too much strain, suggesting rates will move higher.
