Bank of England and ECB leave rates on hold
With the euro zone under more and more pressure and the debt markets still struggling to pull clear of the recent turmoil the European Central Bank yesterday confirmed that rates will remain unchanged for the foreseeable future. This was a situation facing the Bank of England only hours earlier where the MPC decided to maintain UK rates of 0.5%. So what are the prospects for European and UK base rates in the short-term?
Unfortunately it does not look good for European and UK savers in the short to medium term with economic uncertainty, budget cuts and turmoil in the debt markets unlikely to lead to higher base rates for the foreseeable future. The need to maintain rates at relatively low levels is paramount in the fight against a double dip recession as more and more companies feel the harsh winds of recession blowing through yet again.
The other possible fly in the ointment could be inflation which has been fairly strong in the UK in the early months of 2010. Even though the Bank of England believes that UK inflation will subdue in the second half of 2010 this remains to be seen as there are concerns that higher inflation could force the Bank of England to move base rates upwards and curtail any short-term economic recovery.
Share this..
Related stories
UK currency takes another hit against the dollar
Sterling has again fallen against the US dollar amid signs that the Bank of England is looking to introduce a number of major changes to the way it operates with UK banks. It was leaked to the press that Mervyn King, the Gov of the Bank of England, has been in Sweden to talk to Central bank operators in that country with speculation that UK banks could be charged for leaving their money at the Ban...
Read MoreTriple-Dip Recession may be avoided after all
There is fresh optimism that another period of recession, the third in just over five years in the UK, will be avoided. A report from ICAEW / Grant Thornton Business Confidence Monitor (BCM) has revealed that business confidence is now at the highest level since the second quarter of 2011. The BCM survey has forecast that, instead of another period of decline, the UK economy is set to grow by...
Read MoreHave the G20 cried wolf once too often?
After yet another G20 get-together we now have yet another call to arms and a promise that billions upon billions of dollars will be pumped into the worldwide economy. We also have certain promises regarding the banking industry, remuneration and bonuses and while in a perfect world this would give confidence to stock markets around the world, the impact of the announcements has been muted to say...
Read MoreBritish Airways faces seven days of strikes
After the collapse of last-minute negotiations with the Unite union it has been revealed that seven days of strikes have been planned for March. The first of the strikes by the company's 13,500 cabin crews will take place on 20 March, lasting three days, with a second strike on 27 March lasting four days. There are also plans to introduce more strikes in April if talks between the union and the Br...
Read MoreGovernment warned about leaking information to the press
John Bercow, the new Speaker of the House of Commons, has today reminded the UK government that all future key policy statements must be heard by the House of Commons rather than being leaked to the press. His comments come as the UK government stands accused of leaking documents and information to the press with regards to the Bank of England and the potential for changes in the regulatory system...
Read More