In a policy statement, the BOK said “the trend of declining exports has persisted while the improvement in economic agents’ sentiments has been inadequate”, in a slightly more downbeat tone than the previous month.
“The Committee noted this effect was likely to reverse in due course, however, as inflation increased”, the minutes said.
The British central bank’s policymakers said they would not match an expected rate hike by the U.S. Federal Reserve next week, stressing there was “no mechanical link” with its thinking.
“But looking at this NFP (non-farms payrolls) and taking Yellen’s comments into account, which were basically that she likes what she’s seeing, we’re going to be increasing rates here in the States on December 16”. “United Kingdom policy may soon start to look like it’s fallen behind the curve and expectations will grow of an upward move in United Kingdom rates next year”. The upturn in the data weakened calls for additional rate cuts. “I’m satisfied” the criteria set by the Fed to determine when to raise rates “have been substantially met”.
The private consumption, however, posted a recovery thanks to the record-low interest rate and the government’s measures to stimulate the economy. For now, it appears the most likely outcome will be “one and done” for the near term.
Financing debt may become a challenge as the USA dollar appreciates against emerging market currencies, according to the report.
“The odds still clearly favour United Kingdom interest rates finally starting to edge up in 2016, but it is not a stone dead certainty”.
The members of the Monetary Policy Committee (MPC) voted 8-1 to keep things as they were and also predicted that inflation in the United Kingdom would remain below 1% until the second half of 2016.
The Reserve Bank of India has kept the key repo rate unchanged at 6.75% in its fifth bi-monthly monetary policy review. These changes underwhelmed the markets, which had expected even more monetary easing, and the markets sold off Thursday.
By early trading on Friday, cable was down at $1.5135.
Meanwhile, the European Central Bank last week announced a cut to overnight deposit rates from minus 0.2% to minus 0.3% and extended a 60 billion euro (£43 billion) stimulus programme by six months. Accordingly, bond prices fall and yields rise. The benchmark Nikkei average fell 254.52 points or 1.32 percent to 19,046.55, the lowest level since November 4, while the broader Topix index lost 1 percent to close at 1,540.35.