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BoE keeps interest rates unchanged

Thursday, Dec 10 2015
The Bank of England's rate-setters focused on a renewed fall in global oil prices and slower wage growth at home as they voted 8-1 again to keep interest rates at their record low of 0.5 percent. The minutes of the Bank's latest policy meeting showed it was in no hurry to match an expected rate hike by the U.S. Federal Reserve next week as there was "no mechanical link" between the Bank's thinking and that of other central banks.
 
The BoE also said it expected the softer spending cuts announced last month by finance minister George Osborne would give a boost to growth next year. Governor Mark Carney and other Monetary Policy Committee members said the "material news" in the month since they previously met was that the price of oil had "fallen markedly again", which raised the likelihood of inflation staying subdued.
 
They also highlighted a leveling off in wage growth in Britain, something which is central to the Bank's deliberations on when interest rates need to rise. "Despite lower unemployment, nominal pay growth appears to have flattened off recently," the minutes said. The slowdown could be a blip in the numbers, or the result of people working fewer hours, they said.
 
Sterling is currently being traded around 1.5150 area. Pair is likely to find support around 1.51 handle and resistance above 1.52 level. Later today, in the US session, Unemployment Claims figures are scheduled for a release.
More in this category: « UK Trade Balance deficit widen to £11.8 billion Aussie lower due to fall in commodity prices »

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