Bank of England keeps interest rates on hold and cuts growth rate for Labour: Live

While borrowers get a lot of attention, savers are also prepared for a tougher journey and need a look at good savings rates before they disappear, says Myron Jobson, senior personal finance analyst at Interactive Investor. should be put

He said: “The best savings rate is at the time of borrowing. Barring any economic shock, the only possible direction for interest rates is downwards, which means Britons have even less to draw on their savings in the future. Ready to earn.

“The simple message for savers is to act fast to secure the best deals before they disappear. Those who can afford to lock up their money for at least five years or more are, they should consider investing for long-term, inflation-beating returns that far exceed current savings rates.

Anna Leach, chief economist at the Institute of Directors, said 2025 could be a “difficult year” for growth.

It said: “Inflationary pressures for the coming year have now shifted, with wage growth and price-setting inflation expected to remain more stable. But it is unclear whether stronger public sector spending will be offset by weaker public sector spending.” will fill the gap left by the private sector.

“Geopolitical developments add further uncertainty to the outlook and markets will remain sensitive to any upward pressure on government borrowing, which would cause volatility in borrowing costs for businesses and households. As the new As the government tries to change the growth trajectory for the UK, 2025 will be a difficult year, with much depending on how well it spends the extra money it has been allocated.”

According to the Institute for Public Policy Research think tank, the bank should have cut rates.

Reacting to today’s decision by the Bank of England’s Monetary Policy Committee to keep interest rates at 4.75%, Carsten Jung, Principal Research Fellow and Head of Macroeconomics at IPPR said:

“With growth stalling and the labor market slowing, the Bank of England should have cut interest rates today. Given that the Bank now expects zero growth in the final quarter of this year, the Bank’s policy stance Very hard.

“Inflation is broadly on track with expectations. It was always expected to pick up slightly by the end of this year. But price pressures are now expected to ease more sharply due to weaker-than-expected growth. The committee should have put more emphasis on it.

Finance Minister Rachel Reeves has responded by keeping rates at 4.75%.

She said: “I know families are still struggling with high costs. “We want to put more money in the pockets of working people, but this is only possible if inflation is stable and I I fully support the Bank of England to achieve this. “Improving living standards across the country is our top priority, and that’s why I’m saving working people’s pay slips from tax rises, freezing fuel duty and increasing the National Wage for three million people. chose to increase.”

ICAEW director of economics Soren Thero said prolonged high rates are a blow to borrowers, although the main news may be that the bank is backing itself into a corner. If inflation continues to rise and growth remains low — that’s stagnant — that could make it harder to raise rates.

“The Bank’s decision to keep interest rates on hold will, as expected, be a clear blow to households still struggling with hefty mortgage bills and businesses facing rising costs after the Autumn Budget.

“The split vote decision and the muted tone of the minutes suggest that a February interest rate cut remains very much in play, if no deal has yet been reached.

“The Bank of England risks backing itself into a corner on the pace of policy easing because, with inflation likely to rise, the timing of future interest rate cuts could become increasingly complicated, Especially if fears of stagnation become reality.

“Against this backdrop, rate-setters are likely to make smaller moves to cut interest rates over the next year, especially given rising domestic and international inflation risks.”

Jonny Black, Chief Commercial and Strategy Officer at Abrdn Advisors, said:

“Possibly, the Bank of England has kept interest rates at 4.75% in its final announcement for 2024. However, what lies ahead is critical and many are already looking ahead to 2025 after Andrew Bailey confirmed further cuts. Looking to the side.

“Exactly what this will look like will depend on inflation and the performance of the economy as we head into the new year but, for now, it is clear that a steady decline could be seen soon.

“As always, interest rates decide the fate of many homeowners looking at remortgaging and can also affect the decision-making of those sitting on cash savings. – Whether it’s big milestone moments like buying or moving home, or reassessing savings and investments – advisors can help navigate finances through the broader economic landscape. They provide clarity and Can help customers understand decisions are, ensuring that the financial strategy remains robust against any twists and turns.”

The Bank of England said its monetary policy committee voted by a 6-3 majority to keep the bank rate at 4.75 percent. Three members preferred to cut the bank rate by 0.25 percentage points to 4.5 percent. It said: “Since the last MPC meeting, twelve-month CPI inflation has increased to 2.6% in November, from 1.7% in September. This was slightly higher than previous expectations, due to a rise in staples and food. High inflation. Consumer price inflation is expected to rise slightly in the near term. Although domestic inflation expectations have largely normalized A few pointers have been added.

The Bank of England has kept interest rates unchanged at 4.75%.

Traders are scrambling to shake off conditions for a rate cut by the Bank of England in February, the next time policymakers meet to set rates.

It’s now evenly balanced after traders’ bets indicated an 80 percent probability just a week ago.

Meanwhile, the pound has regained some ground against the dollar. Sterling rose 0.7 percent to $1.26.

The FTSE 100 is already reeling from the interest rate hike decision, which is due in less than an hour. It fell 1.4 percent to 8,085.82. An index of the 100 largest companies listed in London has fallen from last month.

Government borrowing costs have also increased. The Labor government has some skin in the game, as the BoE’s decision will dictate how much the Treasury will have to pay to borrow. The yield — the interest you’re currently earning when you buy the bond in the secondary market — rose to 4.604 percent. At the beginning of the month they were around 4.2 percent.