The Bank of England held interest rates on Thursday and said weak growth during a snowy start to 2018 was likely to be only temporary, but it wanted to see a pick-up in the economy in the next few months before raising borrowing costs.
In sharp contrast to widespread expectations just a few weeks ago that it would raise rates, the BoE said its nine rate-setters voted 7-2 to keep them at 0.5 per cent. That was in line with forecasts in a Reuters poll of economists.
Investors responded to the announcement by slightly pushing back their expectations of when the BoE was likely to raise rates for only the second time since the global financial crisis. Sterling fell to a day's low of $1.352, reversing earlier gains, and the yield on two-year British government bonds, which are sensitive to monetary policy expectations, fell modestly.
"Rate-setters have kicked the interest rate can down the road once more," Tom Stevenson, investment director for Personal Investing at Fidelity International said.
Britain's economy grew more slowly than most of its peers last year after a Brexit-driven jump in inflation hit consumer spending power and some businesses delayed long-term investment. Growth slowed even more sharply in the first quarter of 2018 due to a mix of unusually snowy weather and headwinds from Britain's impending exit from the European Union. Surveys have suggested little rebound last month.
The BoE on Thursday cut its forecasts for inflation and for growth, especially in 2018, reflecting the weak first-quarter figures, which the central bank said would probably be revised up. For now, most policymakers wanted to wait to be sure that the weakness passes quickly.
"The recent weakness in data for the first quarter had been consistent with a temporary soft patch, with few implications for ... the outlook for the UK economy," the majority of BoE Monetary Policy Committee members said.
"There was value in seeing how the data unfolded over the coming months, to discern whether the softness in Q1 might persist," they said. This potentially leaves the door open for a rate rise in August, the next time the BoE updates its economic forecasts.
Policymakers Ian McCafferty and Michael Saunders, who again voted for a rate rise, agreed the weak growth so far this year reflected "temporary or erratic factors", but said delaying a rate hike risked more abrupt tightening later on.
BoE governor Mark Carney suggested in April that the central bank might not raise rates in May because of the mixed economic data, causing a sharp reversal in bets on a May hike.
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Read more:
BoE deputy says rates could rise sooner
Bank of England hints at earlier rate rises as economy picks up pace
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The central bank said on Thursday that inflation had fallen faster than it expected. But this was due to a faster fading of the impact of the plunge in sterling on the price of imports, and that domestic inflation pressures continued to rise. Inflation was seen dropping to 2.1 per cent in a year's time, and returning to target a year later - sooner than previously thought - but only if interest rates rose by 25 basis points about three times over the next three years, as markets expect.
Mr Carney said the bank's nine-member rate-setting body thinks the "underlying pace of growth remains more resilient than the headline data suggest", according to AP.
The BoE said it expected Britain's economy would grow by 1.4 per cent this year, down from the 1.8 per cent rate it predicted in February, which was a bit above what most economists thought likely at the time. The lower 2018 growth prediction reflected the early weakness, Bloomberg said.
But slowing consumer lending and a sluggish housing market created greater-than-usual uncertainty about consumer demand, the BoE said. For 2019 and 2020, it predicted GDP growth would pick up to 1.7 per cent, down from 1.8 per cent in its February forecasts.
The BoE thinks that unless interest rates rise, even modest economic growth of about 1.5 per cent a year risks stoking excess inflation, due to Britain's long-standing weak productivity growth and reduced immigration as a result of Brexit. Wage growth was forecast to pick up slightly less strongly this year than had been forecast before. Inflation has fallen after reaching its highest in more than five years in late 2017, but at 2.5 per cent it is still well above the BoE's 2 per cent target.
Since he joined the BoE in 2013, Mr Carney has signalled several times that the time was nearing for rates to rise from the historic low of 0.5 per cent reached during the 2008-09 financial crisis, only for economic data to surprise him.
In November, the BoE raised rates for the first time in over a decade, reversing a cut made shortly after the Brexit vote. In February, Mr Carney said rates might need to rise somewhat faster than markets had expected.
A few days before Thursday's announcement, economists polled by Reuters on average expected rates to rise in August, though a number think the BoE may have missed the boat if growth continues to be lacklustre in the run-up to Brexit.
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
ALRAWABI%20SCHOOL%20FOR%20GIRLS
%3Cp%3ECreator%3A%20Tima%20Shomali%3C%2Fp%3E%0A%3Cp%3EStarring%3A%C2%A0Tara%20Abboud%2C%C2%A0Kira%20Yaghnam%2C%20Tara%20Atalla%3C%2Fp%3E%0A%3Cp%3ERating%3A%204%2F5%3C%2Fp%3E%0A
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Women’s World T20, Asia Qualifier
UAE results
Beat China by 16 runs
Lost to Thailand by 10 wickets
Beat Nepal by five runs
Beat Hong Kong by eight wickets
Beat Malaysia by 34 runs
Standings (P, W, l, NR, points)
1. Thailand 5 4 0 1 9
2. UAE 5 4 1 0 8
3. Nepal 5 2 1 2 6
4. Hong Kong 5 2 2 1 5
5. Malaysia 5 1 4 0 2
6. China 5 0 5 0 0
Final
Thailand v UAE, Monday, 7am
MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
UAE currency: the story behind the money in your pockets
UAE%20Warriors%2033%20Results
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The bio:
Favourite holiday destination: I really enjoyed Sri Lanka and Vietnam but my dream destination is the Maldives.
Favourite food: My mum’s Chinese cooking.
Favourite film: Robocop, followed by The Terminator.
Hobbies: Off-roading, scuba diving, playing squash and going to the gym.
The biog
Favourite food: Tabbouleh, greek salad and sushi
Favourite TV show: That 70s Show
Favourite animal: Ferrets, they are smart, sensitive, playful and loving
Favourite holiday destination: Seychelles, my resolution for 2020 is to visit as many spiritual retreats and animal shelters across the world as I can
Name of first pet: Eddy, a Persian cat that showed up at our home
Favourite dog breed: I love them all - if I had to pick Yorkshire terrier for small dogs and St Bernard's for big
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
Is it worth it? We put cheesecake frap to the test.
The verdict from the nutritionists is damning. But does a cheesecake frappuccino taste good enough to merit the indulgence?
My advice is to only go there if you have unusually sweet tooth. I like my puddings, but this was a bit much even for me. The first hit is a winner, but it's downhill, slowly, from there. Each sip is a little less satisfying than the last, and maybe it was just all that sugar, but it isn't long before the rush is replaced by a creeping remorse. And half of the thing is still left.
The caramel version is far superior to the blueberry, too. If someone put a full caramel cheesecake through a liquidiser and scooped out the contents, it would probably taste something like this. Blueberry, on the other hand, has more of an artificial taste. It's like someone has tried to invent this drink in a lab, and while early results were promising, they're still in the testing phase. It isn't terrible, but something isn't quite right either.
So if you want an experience, go for a small, and opt for the caramel. But if you want a cheesecake, it's probably more satisfying, and not quite as unhealthy, to just order the real thing.
if you go
The flights
Emirates flies to Delhi with fares starting from around Dh760 return, while Etihad fares cost about Dh783 return. From Delhi, there are connecting flights to Lucknow.
Where to stay
It is advisable to stay in Lucknow and make a day trip to Kannauj. A stay at the Lebua Lucknow hotel, a traditional Lucknowi mansion, is recommended. Prices start from Dh300 per night (excluding taxes).
Mia Man’s tips for fermentation
- Start with a simple recipe such as yogurt or sauerkraut
- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.
- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.
- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.
Tips to keep your car cool
- Place a sun reflector in your windshield when not driving
- Park in shaded or covered areas
- Add tint to windows
- Wrap your car to change the exterior colour
- Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
- Avoid leather interiors as these absorb more heat
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Sri Lanka v England
First Test, at Galle
England won by 211
Second Test, at Kandy
England won by 57 runs
Third Test, at Colombo
From Nov 23-27
Credits
Produced by: Colour Yellow Productions and Eros Now
Director: Mudassar Aziz
Cast: Sonakshi Sinha, Jimmy Sheirgill, Jassi Gill, Piyush Mishra, Diana Penty, Aparshakti Khurrana
Star rating: 2.5/5
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THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
MATCH INFO
Europa League final
Who: Marseille v Atletico Madrid
Where: Parc OL, Lyon, France
When: Wednesday, 10.45pm kick off (UAE)
TV: BeIN Sports
Hotel Data Cloud profile
Date started: June 2016
Founders: Gregor Amon and Kevin Czok
Based: Dubai
Sector: Travel Tech
Size: 10 employees
Funding: $350,000 (Dh1.3 million)
Investors: five angel investors (undisclosed except for Amar Shubar)
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
