Ana's Feed
Jan 30, 2014
via MacroScope

Forward guidance is not fully living up to its name

Britain’s economy may have seen one of the fastest rebounds among industrialized nations last year, but half of 56 economists polled by Reuters think the Bank of England has lost some credibility over its handling of the forward guidance policy.

The policy – an advance notice that monetary conditions will not be tightened too fast or too soon – was a way of managing market bets, at a time when the scope for stimulating economies through conventional interest rate cuts was limited.  Many say it was a necessary transition from the ultra-loose rate policy of recent years to a more normal post-crisis one. Indeed, the use of verbal intervention to guide monetary policy has been on the rise in recent years, as shown by this graphic on the Federal Reserve. 

Jan 30, 2014

Sterling slips as growth worries, Fed weigh

LONDON (Reuters) – The pound fell more than half a percent against a broadly stronger dollar on Thursday, with a poor batch of data on business lending denting the case for a rise in official interest rates within a year.

Bank of England Governor Mark Carney reiterated on Wednesday that Britain’s economic recovery had further to run before monetary policy was tightened and the bank’s data showed a 1.9 billion pound fall in lending to businesses in December.

Jan 30, 2014

BoE credibility broadly undermined by rate guidance – Reuters poll

LONDON (Reuters) – The Bank of England’s handling of forward guidance has hurt its credibility, half the economists in a Reuters poll said on Wednesday, only six months after the new policy was begun.

Their opinion emerged even though Britain began one of the fastest recoveries among industrialized nations last year and financial markets had started speculating about when policymakers will need to raise interest rates.

Jan 24, 2014

UK mortgage approvals hit highest since around start of crisis

LONDON, Jan 24 (Reuters) – British lenders approved more
mortgages in December than in any month since around the start
of the financial crisis, data showed on Friday, fuelling concern
that the housing market may be overheating.

Mortgages for homes purchases rose to 46,521 in December -
the highest level since September 2007 – from 45,394 in
November, the British Bankers’ Association said.

Jan 22, 2014

BoE’s McCafferty says discussing next policy move internally

NOTTINGHAM, England, Jan 22 (Reuters) – Bank of England
policymakers are discussing what they will do when unemployment
falls to their threshold level for considering an increase in
interest rates, a top official at the central bank said on
Wednesday.

“I am discussing it internally but I am not going to make
any statements until I have discussed it with my colleagues,”
Ian McCafferty, a member of the BoE’s Monetary Policy Committee,
told reporters.

Jan 21, 2014

CBI factory orders fall, but prospects brighten

LONDON (Reuters) – British factory orders fell in January but the prospects for the next three months were at their strongest in nearly two years, raising expectations that the lagging manufacturing sector is on the mend.

The total order book balance in the survey fell to -2 this month from +12 in December, steeply undershooting expectations for a reading of +10, the Confederation of British Industry’s industrial trends survey showed on Tuesday.

Jan 21, 2014

UK CBI factory orders fall in Jan, but prospects brighten

LONDON (Reuters) – British factory orders fell in January but the prospects for the next three months were at their strongest in nearly two years, raising expectations that the lagging manufacturing sector is on the mend.

The total order book balance in the survey fell to -2 this month from +12 in December, steeply undershooting expectations for a reading of +10, the Confederation of British Industry’s industrial trends survey showed on Tuesday.

Jan 16, 2014
via MacroScope

Relief from UK services inflation seen fleeting

British inflation dipped to 2 percent  in December – its lowest since November 2009 and within the Bank of England’s target. Part of the move was driven by a fall in prices in Britain’s services sector – which constitutes more than three quarters of the country’s output.

Services inflation, which makes up around 47 percent of the consumer price index, eased to  2.4 percent in December – also its lowest since November 2009. Goods inflation – which is more sensitive to global markets than domestically generated services inflation – edged up to 1.7 percent last month. But it has also come down in recent months as a strengthening sterling pushed down import prices.

Jan 14, 2014

Inflation falls to Bank of England target

LONDON (Reuters) – British inflation fell to the Bank of England’s target level in December for the first time in over four years, backing its case to keep interest rates at a record low and giving the government a boost ahead of elections next year.

Consumer prices rose 2.0 percent on the year in December, the Office for National Statistics said, the slowest increase since late 2009 and down from 2.1 percent in November.

Jan 7, 2014

Irish yields hit 8-year lows as debt sale draws bumper demand

LONDON, Jan 7 (Reuters) – Ireland’s 10-year government bond
yields plunged to eight-year lows on Tuesday as the country’s
first debt sale since it exited an international bailout
attracted bumper demand.

Investors bid more than 14 billion euros ($19 billion) for
the new 10-year bond sold via syndication, nearly four times the
size of the final 3.75 billion euro issue, the country’s debt
agency said.

    • About Ana

      "Ana Nicolaci da Costa is UK Economics Correspondent, covering monetary and fiscal policy in London. Ana previously worked as Reuters' Economics Correspondent in Brasilia and covered European markets, including the euro zone debt crisis. She began working for Reuters in 2004 in London, after an internship at the Financial Times. Ana has a Master's degree from the University of London and studied political science as an undergraduate at the University of Nottingham and Institut d'Etudes Politiques de Paris."
      Joined Reuters:
      2004
      Languages:
      English, Portuguese, French, German, Spanish
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