UK Economics Correspondent, London
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Aug 23, 2014

Bank of England deputy says weak UK pay growth could persist

LONDON (Reuters) – Britain’s slow wage growth is not certain to pick up any time soon, despite signs of skills shortages, Bank of England deputy governor Ben Broadbent said in a speech on Saturday.

The BoE has said it does not intend to raise interest rates until there is a clear prospect of stronger wage growth, and so far the picture remains murky, Broadbent told central bankers at an annual conference in Jackson Hole, Wyoming.

Aug 20, 2014

Bank of England splits over rate hike for first time in three years

LONDON (Reuters) – Bank of England policymakers have broken ranks over interest rates for the first time in three years, with two of them unexpectedly voting to tighten policy, in a move that revives speculation about a 2014 rate hike.

Martin Weale and Ian McCafferty – external members of the BoE’s nine-member Monetary Policy Committee – voted to raise interest rates to 0.75 percent from 0.5 percent, according to minutes of the MPC’s Aug. 6-7 meeting released on Wednesday.

Aug 17, 2014

No guarantee Bank of England can pull off plan for gradual rate rises

LONDON (Reuters) – The Bank of England is hoping it can gently wean Britain’s economy off record-low borrowing costs, but its plan for “gradual and limited” rises in interest rates might prove harder to pull off than investors expect.

So far, financial markets agree with BoE Governor Mark Carney’s reassurances that a return to more normal-looking monetary policy will probably not be a painful one.

Aug 14, 2014

Bank of England focuses on weak wages, rate rise lower on agenda

LONDON (Reuters) – The Bank of England dented expectations of a first interest rate hike this year, slashing its forecast for wage growth and saying higher borrowing costs hinged largely on an improved outlook for pay.

Sterling slumped to a 10-week low against the dollar and bond prices rose as traders saw little prospect of a rate rise before 2015, something BoE Governor Mark Carney had urged them to consider as a possibility just two months ago.

Aug 13, 2014

Bank of England slashes wages forecast, says key for policy

LONDON, (Reuters) – The Bank of England slashed its forecast for wage growth on Wednesday and said that how fast wages picked up would be key to determining the timing and pace of interest rate rises.

Just an hour after official data showed British average wages suffered a year-on-year fall in the second quarter of 2014, the BoE cut its forecast for wage growth this year in half to 1.25 percent before picking up more strongly in 2015.

Aug 12, 2014

Bank of England likely to keep markets guessing on rates

LONDON, Aug 13 (Reuters) – Bank of England Governor Mark
Carney is likely to give little away on Wednesday when he will
be pressed on how soon the central bank will start to raise
interest rates.

Economists and markets are split on whether more than a year
of robust economic growth might prompt the BoE to move as soon
as November, or if persistently weak wage growth and a darkening
international outlook could make it wait until early next year.

Aug 8, 2014

Bank of England to keep options open as rate rise draws nearer

LONDON (Reuters) – A year after the Bank of England launched forward guidance on monetary policy, Governor Mark Carney faces the opposite challenge next week – to say as little as possible about exactly when interest rates will start rising.

Carney is due to present the British central bank’s updated economic forecasts at 10:30 AM BST on Wednesday.

Aug 6, 2014

UK house prices surge again, but industrial data disappoint

LONDON, Aug 6 (Reuters) – Consumers continued to power
Britain’s economy last month as house prices surged and car
sales boomed, although weak industrial output in June was a
reminder that a balanced recovery still looks a way off.

House prices recorded their biggest annual rise last month
since the start of the financial crisis, figures from mortgage
lender Halifax showed on Wednesday, casting doubt on other signs
that the housing market may be slowing.

Aug 5, 2014

Surprise jump in UK services PMI heralds continued strong growth

LONDON, Aug 5 (Reuters) – Britain’s services industry grew
last month at the fastest pace since November, raising the
chance that the rapid economic recovery will continue for the
rest of the year and potentially bringing forward a rise in
interest rates.

The monthly Markit/CIPS purchasing managers index for the
services sector beat economists’ expectations and contrasted
with a mostly downbeat recent string of economic data.

Aug 5, 2014

UK services PMI rises to eight-month high – Markit/CIPS

By David Milliken

LONDON,(Reuters) – Activity in Britain’s services industry increased last month at the fastest rate since November, helping overall private-sector activity to its briskest growth in three months, a survey showed on Tuesday.

The figures are likely to revive speculation over whether the Bank of England will raise interest rates before the end of the year, and contrast with other data pointing to a slight slowdown in British growth in the second half of the year.

    • About David

      "David keeps a close watch on the UK economy, the Bank of England and the British government debt market. Previously he worked in Frankfurt, covering the European Central Bank and euro zone economy, and in Brussels where he reported on everything from EU summits to Belgian supermarkets."
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