Inflation should return to its 2% target within the next two years, the Bank of England said on Wednesday, but labour productivity remains the key uncertainty, as it downgraded its forecast for UK GDP growth from 2.9% for 2015, to 2.5%.
China’s interest rate cut announced over the weekend is widely expected to be just the latest move in a monetary loosening process that could ultimately end in quantitative easing.
Policy divergence will reach a breaking point and either drag the US and UK back into quantitative easing or trigger widespread reflation, says Rathbones’ Bryn Jones.
Investors are set to benefit from a quantitative easing ‘second wind’ which will create opportunity in the corporate bond sector, says RBC Wealth Management’s Hakan Enokssen.
Unemployment in the UK fell to 5.6% in the three months to February, the office for National Statistics said on Friday, the lowest level since 2008. At the same time, the number of people in employment rose to a record of 31.05m.
The last five years have seen the fewest high yield defaults in modern history, Deutsche Bank reported on Wednesday.
Federal Reserve chair Janet Yellen dropped the word patient from her rhetoric at the March FOMC meeting as anticipated, but soothed markets with alternative language which was equally dovish.
The Global Liquidity Index has shed light on the extent to which the rise in the value of the US dollar is being driven by monetary policy made in Frankfurt and Beijing, rather than Americas economic strength.
The Bank of England monetary policy committee is still split seven-two on whether the UK interest rate needs to be raised, minutes released today show.
Monetary policy doves have had their position boosted by a US non-farm payroll number for August which significantly undershot most forecasts.
The Bank of England and European Central Bank both kept rates on hold in line with market expectations.
The minutes of the Bank of Englands latest monetary policy committee meeting show a continuation of the build-up toward a tipping point
