Bank of England votes


The pound fell again yesterday after the  Bank of England members voted 7-2 in favor of leaving  interest rates unchanged at 0.5%. The decision came after a slew of weak economic data put governor Mark Carney's plans to raise rates above historic 0.5 per cent levels on hold. Compounding the poor data for the UK was the Royal Institute of Chartered Surveyors who said London house prices had their worst month in a decade. Carney said weak growth during a snowy start to 2018 was likely to be temporary, but it wanted to be sure the economy was picking up in coming months before raising borrowing costs. The BoE  cut its 2018 growth prediction from 1.8% to 1.4%  and trimmed its inflation forecasts - expected growth would gain speed again. 

Carney was persisting with the message that rates would likely need to rise once the recovery was clear. And despite weak growth, the BoE sees the need for rate hikes because it thinks the economy could overheat due to long-term weak productivity and lower immigration driven by Brexit.


New applications for U.S. unemployment benefits unexpectedly held near more than a 48-year low last week, pointing to a further tightening of labor market conditions. Initial claims for unemployment benefits were unchanged at 211,000 for the week ended May 5, the Labor Department said. Claims dropped to 209,000 during the week ended April 21, which was the lowest level since December 1969. The labor market is considered to be near or at full employment, leading to a slowdown in job growth as employers struggle to find skilled workers.  Headline inflation in the US rose 0.2% in April, below the economists’ estimates of 0.3%. Core inflation - which strips out energy and food - rose 0.1% in April and was up 2.1% over the last 12 months. It was the second month in a row with annual core inflation above 2.0

Key Announcements

14:15- EUR: ECB President Mario Draghi makes a speech