BoE keeps interest rates steady again
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UPDATE - BoE holds UK interest rates at 3.5 pct
Reuters
UPDATE - BoE holds UK interest rates at 3.5 pct
Thursday September 4, 7:05 am ET
(Adds market reaction, comment from BCC)
LONDON, Sept 4 (Reuters) - The Bank of England kept interest rates unchanged at their 48-year low of 3.5 percent for the second month in a row in the face of signs that consumers are piling on debt too fast and the economy was improving.
All 45 analysts polled by Reuters had predicted the central bank would do nothing two months after it had chopped its benchmark repo rate by a quarter-point to counteract the weakness in the global economy.
Data since that reduction have suggested that consumer spending remains strong and raised concerns that profligate Britons are borrowing too much and not budgeting for any interest rate rises in the future.
Interest rate futures and gilts nudged higher on the news while sterling was steady at around $1.572. The FTSE 100 index of leading shares was static at 4,255, down seven points on the day. Interest rate futures are now pricing in an interest rate rise by the end of the year and many economists now think the next move in borrowing costs will be up but probably not until well into next year.
Business was happy with the Bank's announcement.
"This decision is acceptable to business at the present moment," said David Frost, Director General of the British Chambers of Commerce.
"The record low interest rates we've seen lately have been a boost to business at a very uncertain time."
Figures this week only cemented the view that the economy no longer needs any salve.
The CIPS/Reuters service sector business activity index surged to a 2-1/2 year high in August and even the normally moribund manufacturing sector seems to have sprung to life, expanding for the second month in a row.
And mortgage lending surged by a record amount in July as consumers took advantage of the BoE's last rate cut.
UPDATE - BoE holds UK interest rates at 3.5 pct
Thursday September 4, 7:05 am ET
(Adds market reaction, comment from BCC)
LONDON, Sept 4 (Reuters) - The Bank of England kept interest rates unchanged at their 48-year low of 3.5 percent for the second month in a row in the face of signs that consumers are piling on debt too fast and the economy was improving.
All 45 analysts polled by Reuters had predicted the central bank would do nothing two months after it had chopped its benchmark repo rate by a quarter-point to counteract the weakness in the global economy.
Data since that reduction have suggested that consumer spending remains strong and raised concerns that profligate Britons are borrowing too much and not budgeting for any interest rate rises in the future.
Interest rate futures and gilts nudged higher on the news while sterling was steady at around $1.572. The FTSE 100 index of leading shares was static at 4,255, down seven points on the day. Interest rate futures are now pricing in an interest rate rise by the end of the year and many economists now think the next move in borrowing costs will be up but probably not until well into next year.
Business was happy with the Bank's announcement.
"This decision is acceptable to business at the present moment," said David Frost, Director General of the British Chambers of Commerce.
"The record low interest rates we've seen lately have been a boost to business at a very uncertain time."
Figures this week only cemented the view that the economy no longer needs any salve.
The CIPS/Reuters service sector business activity index surged to a 2-1/2 year high in August and even the normally moribund manufacturing sector seems to have sprung to life, expanding for the second month in a row.
And mortgage lending surged by a record amount in July as consumers took advantage of the BoE's last rate cut.
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BoE keeps interest rates steady again
Reuters
BoE keeps interest rates steady again
Thursday September 4, 7:00 am ET
LONDON, Sept 4 (Reuters) - The Bank of England kept interest rates unchanged at their 48-year low of 3.5 percent for the second month in a row in the face of signs that consumers were piling on debt too fast and the economy was improving.
All 45 analysts polled by Reuters had predicted the central bank would do nothing two months after it had chopped its benchmark repo rate by a quarter-point to counteract the weakness in the global economy.
But data since that reduction has suggested that consumer spending remains strong and raised concern that profligate Britons are borrowing too much and not budgeting for any interest rate rises in the future.
Figures this week only cemented the view that the
BoE keeps interest rates steady again
Thursday September 4, 7:00 am ET
LONDON, Sept 4 (Reuters) - The Bank of England kept interest rates unchanged at their 48-year low of 3.5 percent for the second month in a row in the face of signs that consumers were piling on debt too fast and the economy was improving.
All 45 analysts polled by Reuters had predicted the central bank would do nothing two months after it had chopped its benchmark repo rate by a quarter-point to counteract the weakness in the global economy.
But data since that reduction has suggested that consumer spending remains strong and raised concern that profligate Britons are borrowing too much and not budgeting for any interest rate rises in the future.
Figures this week only cemented the view that the
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Figas
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