Interest rate hikes Financial News

LONDON — The Bank of England on Thursday ended a run of 14 straight interest rate hikes after new data showed inflation is now running below expectations.

Bank of England halted its long run of interest rate increases on Thursday as the British economy slowed, but it said it was not taking a recent fall in inflation for granted. A day after a surprise slowing in Britain's fast pace of price growth, the BoE's Monetary Policy Committee voted by a narrow margin of 5-4 to keep Bank Rate at 5.25%. Four members — Jon Cunliffe, Megan Greene, Jonathan Haskel and Catherine Mann — voted to raise rates to 5.5%. It was the first time since December 2021 that the BoE did not increase borrowing costs. «There are increasing signs of some impact of tighter monetary policy on the labour market and on momentum in the real economy more generally,» the MPC said in a statement. It cut its forecast for economic growth in the July-September period to just 0.1% from August's forecast of 0.4% and noted clear signs of weakness in the housing market. Growth for the rest of the year was likely to be weaker than previous forecasts, the BoE said. Record growth in workers' pay, which has been a big concern for the central bank, was not backed up by other measures of the labour market, it noted, suggesting the BoE's policymakers expected it to slow down soon. «CPI inflation is expected to fall significantly further in the near term, reflecting lower annual energy inflation, despite the renewed upward pressure from oil prices,» the BoE said. But it said services inflation was expected to remain elevated. The BoE's decision to pause its rate hikes came a day after the U.S. Federal Reserve also opted to keep borrowing costs on hold.

By Ankika Biswas and Shristi Achar A

On this week’s episode of The Market Report, analyst Marcel Pechman discusses Bitcoin’s (BTC) strength ahead of the United States Federal Reserve’s Federal Open Market Committee (FOMC) meeting, with investors betting on an interest rate freeze.

Doug Ford has become the second Canadian premier to formally express his displeasure with interest rate hikes, calling on the Bank of Canada to end the increases, which he says are “hurting people.”

After hiking interest rates to their highest in 22 years last month, the central bank’s Federal Open Market Committee minutes revealed cracks in the consensus among members.

Investing.com — Bitcoin dropped on Thursday after minutes from the Federal Reserve's last meeting suggested that further interest rate increases may be needed in the future, weighing on risk sentiment.

Philadelphia Federal Reserve President Patrick Harker on Tuesday indicated that the central bank could be at the end of its current rate-hiking cycle.

Another Monday, another week full of important figures and decisions that could affect your clients’ investment decisions.

Statistics Canada says retail sales rose 0.2 per cent to $66.0 billion in May, helped by gains at new car dealers and grocery stores.

lending rate (MCLR)—internal benchmark banks used to price loans to companies—has increased 140 basis points (bps) since April, the repo rate used to price retail loans was raised 250 bps in the same period. Since October 2019, banks have been using external benchmarks—mostly the repo rate—to price retail and small business loans, although most corporate loans are linked to MCLR.

Two consecutive interest rate hikes from the Bank of Canada are expected to cool the national housing market after activity heated up in the spring, but experts warn supply is too tight for further price drops.

The Bank of Canada raised it benchmark lending rate 25 basis points to five per cent on July 12, adopting what economists called a “hawkish tone” and reminding Canadians that bringing inflation back to the two per cent target remains its priority.

The May consumer price index (CPI) rose 3.4 per cent year over year, which was a big drop from the 4.4 per cent year-over-year number in April, but that doesn’t tell the real story.

WASHINGTON – Federal Reserve Chairman Jerome Powell confirmed Wednesday that smaller interest rate increases are likely ahead even as he sees progress in the fight against inflation as largely inadequate.

Federal Reserve officials at their July meeting indicated they likely would not consider pulling back on interest rate hikes until inflation came down substantially, according to minutes from the session released Wednesday.

St. Louis Federal Reserve President James Bullard said Wednesday that the central bank will continue raising rates until it sees compelling evidence that inflation is falling.

The Federal Reserve would raise interest rates at its May meeting after it hiked rates for the first time since March of 2018. The nation’s central bank, is now, expected to lift the benchmark Fed funds rate by 0.5 percent, according to the CME FedWatch Tool.

Cleveland Federal Reserve President Loretta Mester said Friday she's in favor of raising interest rates quickly to bring down inflation, but not so quickly as to disrupt the economic recovery.

Atlanta Federal Reserve President Raphael Bostic on Tuesday expressed concern about the impact that rate hikes could have on the U.S. economic recovery, saying the central bank shouldn't move so fast that it chokes off growth.

Getting inflation under control will require raising interest rates at a faster pace than normal even though the pace of price increases probably has peaked, Federal Reserve Governor Christopher Waller said Wednesday.