Carney: UK's consumer slowdown has begun

The UK economy shrugged off expectations of a recession after last year's referendum, and chalked up one of the fastest growth rates among major rich economies. On the weakening economy, which saw GDP increase only 0.3 per cent in the first quarter of 2017 compared to 0.7 per cent in the last three months of 2016, the bank said, "The slowdown appears to be concentrated in consumer-facing sectors, partly reflecting the impact of sterling's past depreciation on household income and spending".

"The MPC's projections continue to be conditioned on a smooth transition to an average of possible outcomes for the UK's post-Brexit trading arrangements", Carney said.

But Mr Carney warned that improving fortunes were based on a "smooth" adjustment when it came to European Union withdrawal that would see a transition period to avoid a cliff edge departure. If the Bank's outlook for pay this year proves correct, it would leave wages falling in real terms - once adjusted for inflation.

"There's a lot resting on the assumption that the sustainability of growth and pick-up in wages will be aided by a smooth Brexit", said Tim Graf, head of European macro strategy at State Street Global Markets.

"It could also be as simple as there is right now a silent period, so to speak, when it comes to the Brexit negotiations because of the United Kingdom election".

For this reason, it's unlikely Mark Carney or the Bank will be particularly bullish today and with political uncertainty both in Westminster and in the UK's relationship with Brussels, there's a slim chance that markets will have to rush to price in expectations of imminent policy tightening.

However, that statement was based on the market view over the 15 working days to 3 May, which was for only one rate rise to 0.5% over the next three years. It said that around 500,000 jobs could have been at risk if the bank had not cut interest rates in August.

USA wheat futures drop to 3-week low, soy rises, corn weak
Grain futures were under pressure on continued pessimism in the commodity sector, with crude-oil prices lower Tuesday. That crop is still recovering from the late-April storm that produced up to a foot of snow in western areas.

The BoE's Monetary Policy Committee (MPC) voted 7-1 in favour of keeping interest rates on hold at their record low 0.25 per cent this month, as expected in a Reuters poll of economists.

USA academic Kristin Forbes, who leaves the MPC at the end of June, again voted to raise rates to 0.5 percent.

The BoE has already said that certain MPC members other than Forbes are ready to hike, saying in the minutes of its last meeting: "Some members noted that it would take relatively little further upside news on the prospects for activity or inflation for them to consider that a more immediate reduction in policy support might be warranted".

Tom Stevenson, investment director for Personal Investing at Fidelity International, said there were "no big surprises" in the Bank of England's announcement.

And while inflation hit a higher-than-forecast 2.3% in February, the recent rebound in the pound since the snap General Election was called might rein in price rises later in the year.

Inflation in March was at 2.3%, according to the Office for National Statistics, above the bank's target of 2%. He expects real wage growth to eventually pick up to 3.5 percent next year from around 2.0 percent at present as businesses find it harder to recruit staff, but added there would be "consequences" if it does not.

Related News:

  • Four spot no influence on Arsenal - Wenger in latest future hint

    But now we have three games and we have to give everything, like we did today, to try and get everything out of all the games. "That will be four points more than previous year , so let's focus on finishing as well as we can".
    Number of Australian businesses hit by cyber attack rises

    Number of Australian businesses hit by cyber attack rises

    The 22-year-old told the BBC: "We have stopped this one, but there will be another one coming and it will not be stoppable by us". Among those hit were Russia's Interior Ministry and companies including Spain's Telefonica and FedEx in the US.
    You can now make calls between Amazon Alexa devices

    You can now make calls between Amazon Alexa devices

    The Echo Show integrates with compatible home security cameras like Ring and Arlo to beam the video feed to the integrated screen. Amazon has built two speakers into the Echo Show, so this will likely be the best Echo device for listening to music.
  • Wayne Rooney focused on fighting for Manchester United place

    On Sunday this came to fruition on Sunday as Manchester United played a very weakened and defensive team at Arsenal. Whatever competition you're in, especially at this club, with the team we've got, we're looking to win it.

    Oil prices rise amid talk of limiting production through 2018

    The agreement was the first of its kind in around eight years and spurred a 25pc rally in crude prices in the weeks that followed. Under the original deal, Russian Federation said it would cut average daily production by 300,000 barrels per day.
    Huge cyberattack ebbs as investigators work to find culprits

    Huge cyberattack ebbs as investigators work to find culprits

    Most ATMs were running fine, there could be some which may not have updated Microsoft's Windows operating system, sources said. Federal Trade Commission, which has previously sued companies for misrepresenting their data privacy measures.
  • Former DNI Clapper says Russian Federation likely sees Comey's firing as "another victory"

    But he said it's a "professional courtesy" to accept an invitation from the president for dinner. The FBI director serves a 10-year term but can be replaced by the president.
    Boston Celtics shake off Washington Wizards to make National Basketball Association  conference finals

    Boston Celtics shake off Washington Wizards to make National Basketball Association conference finals

    Boston may be opening a new era of basketball relevance, but the last chapter from the Big Three's story isn't quite complete. But Washington also had 15 turnovers, leading to 17 of the Celtics' points. "I knew it would be a big-time game tonight".
    YouTube TV fleshes out its lineup with AMC, BBC America, and more

    YouTube TV fleshes out its lineup with AMC, BBC America, and more

    The cord-cutting plan, which launched last month in select USA cities, will also include NBC Universo, SundanceTV, We TV and IFC. Hulu made deals with 21st Century Fox, ABC, NBC, CBS, Turner Networks, A+E Networks and Scripps Networks for its $39.99 plan.
  • Terry mulls retirement after Sunderland match

    Terry mulls retirement after Sunderland match

    The Premier League trophy will be presented following Chelsea's final match of the season on Sunday. If your head and body are telling you to play on, then it's right to continue trying.

    Kurdish-led forces advance on Daesh-held Raqqa

    It's supposed to be the president who tempers such decisions with his own judgment and consultations with other senior advisors. Officials have suggested it could step up air strikes on PKK bases in northern Iraq, or YPG targets in Syria.

    Sen. Warren: GOP blocking Democrats from health care talks

    The longer that health care takes to finish, the longer that Republicans must wait to get moving on tax reform and other items. So far, its strategy appears to be selectively suggesting potential provisions of the legislation to the media.


Most liked

Manchester United lift full-year revenue and profit forecast
So it looks like we should expect some "interesting" sides from United against Southampton and Crystal Palace as Mourinho looks to get his squad in tip-top shape to face Ajax.

Mo'Nique Tells Lee Daniels, Tyler Perry, Oprah to Suck Her Dick
Will this rant get her some more work though? Thanks for your continued support. . Our role as an independent, fact-based news organization has never been clearer.

Britain worked through night to counter cyber attack on health service -minister
The virus exploits a vulnerability in Microsoft Windows software, first identified by the US National Security Agency. The country's banking system was also attacked, although no problems were detected, as was the railway system.

Governor McAuliffe moves to regulate power plant emissions
D'Onofrio said. "Meanwhile the free market has led to significant year-over-year reduction in Carbon dioxide emissions in the U.S.

McMaster: Trump didn't jeopardize security with Russian exchange
US allies including Australia, New Zealand and Japan cited the White House denials and said intelligence sharing would continue. Reporters spent much of the evening camped out adjacent to Press Secretary Sean Spicer's office, hoping for answers.

Richard Spencer's 'Alt-Right' Torch Protest Is 'Like The KKK'
The town is home to the prestigious University of Virginia, which boasts an extremely well-rounded and diverse student body. Later, a group chanted "You will not replace us!" in a darkened park.

Kremlin says reports Trump disclosed intelligence are 'nonsense'
In addition, Secretary of State Rex Tillerson said Trump and Lavrov "did not discuss sources, methods or military operations". The Kremlin described as "complete nonsense" on Tuesday media reports that U.S.

F.N.B. Corp (FNB) Stake Boosted by Profund Advisors LLC
Heading into the stock price potential, Axsome Therapeutics needs to grow just 393.83% to cross its median price target of $20. Recently analysts working for various investment brokerages have changed their ratings and price targets on shares of F.N.B.

ITunes is coming to the Windows Store
The feature will also work with corporate OneDrive accounts and SharePoint Online team sites, added Teper. Windows Story Remix uses AI and deep learning to organize and transform photos and videos into stories.

Fla.'s Housing Market: Sales, Median Prices Up in 1Q 2017
The HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. The outlook is slightly brighter for LA County buyers investing in a starter home.

1.2 million adolescents die needlessly each year: World Health Organization report
Most of the adolescents killed in the road accidents are likely to be road users such as pedestrians, cyclists, and motorcyclists. Around 1.2 billion people, or one in every six persons, are adolescents aged between 10 to 19 years.

Delhi HC to hear dengue, chikungunya menace matter
In 2015, 16,000 dengue cases were reported and 60 people lost their lives to the disease. We feel extremely pained over loss of human life", the bench said.

Sanders to campaign with Montana Dem in special election
But Democrats pounced on Gianforte when he seemed to suggest during the teleconference that there were ways around his pledge. Campaign spokesman Brock Lowrance on Monday called End Citizens United a "sham group" and the complaint "bogus".

Wreck closes both lanes on I-95
Several of the vehicles caught fire in the crash, with the nearby median and shoulders of the interstate also catching on fire. News13 viewer Vicki Harding Sorensen posted a photo from I-95 with visible smoke coming from the area.

Ransomware cyber-attacks slow but fears remain
Among those hit were Russia's Interior Ministry and companies including Spain's Telefonica and FedEx Corp.in the U.S. Chinese state media said 29,372 institutions there had been infected along with hundreds of thousands of devices.