Andrew Bailey Appointed New Governor of the Bank of England

Andrew Bailey, the current Chief Executive Officer of the Financial Conduct Authority, has been confirmed as the next Governor of the Bank of England. He will replace Mark Carney, who has held the role since 2013, in March 2020.

Sajid Javid, the Chancellor of the Exchequer, said at a press conference:

“I am delighted to announce that the next Governor of the Bank of England will be Andrew Bailey. When we launched this process, we said we were looking for a leader of international standing with expertise across monetary, economic and regulatory policy.

In Andrew Bailey, that is who we have found. He was the standout candidate in a competitive field. Without question, he is the right person to lead the Bank as we forge a new future outside the EU and level-up across our great country.

Andrew brings unparalleled experience of central banking and can draw on thirty years of experience in every aspect of the Bank’s work from monetary policy to financial stability to the regulation of individual banks and insurance companies.

During the financial crisis, he led the teams who were on the front line of the Bank’s response. And it is a tribute to his integrity and his character that he emerged from the most serious crash in living memory with his reputation enhanced in Whitehall, in the City of London and in financial capitals around the globe. Many of you will know Andrew in his current role as Chief Executive of the Financial Conduct Authority.

He took over the organisation at a difficult time and has transformed it, putting the needs and interests of consumers first.

I would particularly highlight his proud record of increasing the diversity of the FCA’s senior leadership team. And under his leadership, he is committed to making the Bank a more open and diverse institution.

In short, the breadth and depth of his experience at the very highest levels are unmatched. So I am delighted that Andrew has agreed to serve a full eight-year term. He will take up the post of Governor on March 16th, leaving time for an orderly transition, and a pre-commencement hearing of the Treasury Committee, should they request one.”

Bank of England Cuts UK Growth Forecast

The Bank of England has cut the growth forecasts for the UK economy to 1.3% this year, from the previous figure of 1.5%. The bank warned that Brexit was causing an negative impact on the economy and was leading to “a marked depreciation of the sterling exchange rate”.

The bank’s report also noted:

“Brexit-related developments, such as stockbuilding ahead of previous deadlines, are making UK data volatile. After growing by 0.5% in 2019 Q1, GDP is expected to have been flat in Q2, slightly weaker than anticipated in May. Looking through recent volatility, underlying growth appears to have slowed since 2018 to a rate below potential, reflecting both the impact of intensifying Brexit-related uncertainties on business investment and weaker global growth on net trade.”

Bank of England Governor Says Brexit May Slow Interest Rates Rise

Mark Carney, the Governor of the Bank of England, has said that he expects interest rates to rise this year, but that they may be slower because of the impact of Brexit. The markets are expecting a 0.25% rate rise in May, but Carney warned that this wasn’t inevitable.

Carney said:

“The biggest set of economic decisions over the course of the next few years are going to be taken in the Brexit negotiations and whatever deal we end up with. And then we will adjust to the impact of those decisions in order to keep the economy on a stable path”.

Interest rates are currently at 0.5%, but a rise to 0.75% is expected by the end of 2018 in a bid to keep control of inflation. The bank increased interest rates from 0.25% to 0.5% in November 2017, the first increase in a decade.

Bank of England Confirms Interest Rates will Rise to 0.5%

The Bank of England has announced that interest rates will rise from 0.25% to 0.5%. The Bank of England Monetary Policy Committee voted by seven votes to two votes on 2 November 2017 to increase rates, which hadn’t been increased since 2007.

A statement from the Bank of England said:

“The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 1 November 2017, the MPC voted by a majority of 7-2 to increase Bank Rate by 0.25 percentage points, to 0.5%. The Committee voted unanimously to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £10 billion. The Committee also voted unanimously to maintain the stock of UK government bond purchases, financed by the issuance of central bank reserves, at £435 billion”.

Bank of England Holds Interest Rates at 0.25%

The Bank of England have confirmed that interest rates will remain at 0.25% following a meeting of the Monetary Policy Committee (MPC). The Bank said in a statement:

“Six members thought that the current policy stance remained appropriate to balance the demands of the MPC’s remit. Two members considered it appropriate to increase Bank Rate by 25 basis points. All members agreed that any increases in Bank Rate would be expected to be at a gradual pace and to a limited extent. The Committee will continue to monitor closely the incoming evidence, and stands ready to respond to changes in the economic outlook as they unfold to ensure a sustainable return of inflation to the 2% target”.

Governor of the Bank of England Says Brexit has Hampered Growth

Mark Carney, the Governor of the Bank of England, has warned that business investment has slowed due to Brexit. His comments come as the bank has cuts its growth expectation for the UK economy from 1.9% to 1.7%.

Carney said:

“Businesses have …. since the referendum invested much less aggressively than usual in response to an otherwise very favourable environment.”

Carney added that Brexit was also having an effect on wage growth, saying:

“There is an element of Brexit uncertainty which is affecting the wage bargaining. Some firms, potentially a material number of firms, are less willing to give bigger pay rises given that it is not as clear what their market access is going to be over the course of the next few years”.

Mark Carney, Governor of the Bank of England, Warns of Difficult Times Ahead

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Mark Carney, the Governor of the Bank of England, has said that there are “difficult times” ahead for the poorest in society because of inflationary pressures in the economy following the Brexit vote.

Carney said at an event in Nottingham:

“We’re willing to tolerate a bit of overshoot in inflation over the course of the next few years in order to avoid that situation, to cushion the blow”.

The abandoning of the inflationary target will put pressure on Theresa May, the Prime Minister, to spell out how the Government will deal with higher than expected inflation.

Interest Rates Cut to 0.25%

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Interest rates have been cut from 0.5% to 0.25% by the Bank of England it has been announced today. The bank has also lowered its growth prediction from 2.3% to 0.8% following the Brexit vote.

The cut is the first change since 2009 and it is also the lowest level of interest rates that there has been. In a statement the Bank of England said:

“The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending 3 August 2016, the MPC voted for a package of measures designed to provide additional support to growth and to achieve a sustainable return of inflation to the target. This package comprises: a 25 basis point cut in Bank Rate to 0.25%; a new Term Funding Scheme to reinforce the pass-through of the cut in Bank Rate; the purchase of up to £10 billion of UK corporate bonds; and an expansion of the asset purchase scheme for UK government bonds of £60 billion, taking the total stock of these asset purchases to £435 billion. The last three elements will be financed by the issuance of central bank reserves”.

Bank of England Confirms No Changes to Interest Rates

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Mark Carney, the Governor of the Bank of England, has confirmed that UK interest rates will remain at 0.5%. Some analysts had expected interest rates to be cut to 0.25% today. The pound has initially strengthened against on the dollar based on the news.

Labour express concern over the cut in the UK’s growth forecasts

John McDonnell GB Labour MP Hayes and Harlington

John McDonnell, the Shadow Chancellor of the Exchequer, has expressed concern following the cut in the UK’s growth forecast by both the European Commission and the Bank of England.

The Bank of England confirmed today that they were cutting the UK’s growth prediction from 2.5% down to 2.2%. The bank’s report also cut the expected increase in wage growth from 3.75% down to 3%.

In a statement McDonnell said:

“It’s unwelcome that both the EU Commission and the Bank of England have cut their expected growth forecasts for the UK.

Labour has been cautioning for several months now about growing global uncertainty, something that George Osborne has only woken up to recently.

We should be particularly concerned that, in Mark Carney’s own words, the “accelerating fiscal consolidation” is part of the reason for why UK growth is expected to dip below past averages.

This is further evidence that the Chancellor’s austerity programme is driven by ideology and could be undermining the potential of the UK economy”.