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Bank of EnglandThe Bank of England has left its main interest rate at 0.25% but says another cut is still a possibility.

The decision of the Monetary Policy Committee (MPC) to leave rates at their new, historically low, level was no surprise.

Last month the Bank halved its bank rate from 0.5% as it tried to ensure the stability of the UK’s banking system in the aftermath of the June Brexit referendum vote.

That was the first rate cut since 2009.

But the Bank said again that it might cut rates further in the coming months, even though the immediate economic after-shock of the Brexit vote now appears to be weaker than first thought.

“A number of indicators of near-term economic activity have been somewhat stronger than expected,” the Bank said in the minutes of its latest MPC meeting.

It added that if its economic forecasts in November were similar to those it had formulated in August, then “a majority of members expected to support a further cut in bank rate to its effective lower bound at one of the MPC’s forthcoming meetings during the course of the year.”

The Bank noted that a variety of economic indicators have suggested that the UK economy has shrugged off the post-referendum surprise in the short-term.

As a result, the Bank is not as gloomy about the short-term state of the economy as it was a month ago.

But it said that it still expects the pace of economic activity in the July-September period to have halved from the growth rate recorded earlier in the year.

Many families could not afford a month’s rent if they lost job – Shelter

One in three families in England could not pay their rent or mortgage for more than a month if they lost their job, a study for the charity Shelter suggests.

High housing costs and a lack of personal savings are cited by the charity as reasons for this.

The online survey by pollsters YouGov in July questioned 1,581 people in working families with children.

“Strong protections” are in place for “those who fall on difficult times,” a government spokesman commented.

The spokesman said: “We are introducing the National Living Wage, increasing the personal tax allowance and giving the next generation choice and flexibility in their savings, including the Help to Save scheme for people on low incomes.

“We are continuing to spend around £90bn a year on working age benefits to ensure a strong safety net for the most vulnerable.

“And for those who do fall on difficult times, there are strong protections in place to guard against the threat of homelessness, and ensure we don’t return to the bad old days when homelessness in England was nearly double what it is today.”

Source – www.bbc.co.uk/news

 

BOEUK interest rates have been cut from 0.5% to 0.25% – a record low and the first cut since 2009.

The Bank of England announced a range of measures to stimulate the UK economy including buying £60bn of UK government bonds and £10bn of corporate bonds.

The Bank also announced the biggest cut to its growth forecasts since it started making them in 1992.

It has reduced its growth prediction for 2017 from the 2.3% it was expecting in May to 0.8%.

As part of the package of measures designed to boost growth following the UK’s vote to leave the EU in June, the Bank is also introducing a new Term Funding Scheme, which will lend directly to banks at rates close to the new 0.25% base rate, to encourage them to keep lending.

The exact rates they are offered will depend on whether the total amount they are lending has fallen. The scheme is designed to make sure that lower interest rates are passed on to businesses and households.

The money will be lent to banks for four years and the Bank has said the terms of the scheme will not become less generous for at least 18 months. It predicts that the amount of money lent through the scheme could reach about £100bn. Continue reading

Bank base rateThe Bank of England has held the UK’s main interest rate at 0.5% despite intense speculation that it would cut rates.

The Monetary Policy Committee voted 8-1 to leave rates unchanged, but minutes of the meeting showed most members think the Bank will act next month.

Interest rates have remained on hold since the Bank cut to the record low of 0.5% in March 2009.

The FTSE 100 lost some earlier gains in the wake of the Bank’s decision.

Financial markets had priced in an 80% chance of the Bank cutting rates this month

BOEThe Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target and in a way that helps to sustain growth and employment.  At its meeting ending on 13 April 2016 the MPC voted unanimously to maintain Bank rate at 0.5%.  The Committee also voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion.

UK interest rates have been held at 0.5% once again by the Bank of England.

All nine members of the Bank’s Monetary Policy Committee (MPC) have voted to keep rates at their record low, where they have now been for seven years.

The decision to freeze rates comes amid worries about global growth and uncertainty ahead of the EU referendum.

The Bank said uncertainty in the run-up to the referendum on EU membership – to be held on 23rd June – had hit sterling, and that UK economic growth could slow.

“There appears to be increased uncertainty surrounding the forthcoming referendum,” policymakers said and

“That uncertainty is likely to have been a significant driver of the decline in sterling”, “It may also delay some spending decisions and depress growth of aggregate demand in the near term.”

Limited companies not exempt from 3% Stamp Duty: Budget 2016

In a shock move, a policy statement supporting the 2016 Budget confirmed investors buying residential property inside a limited company tax wrapper will still be hit by the 3% surcharge.

In a bid to sidestep the 3% premium, thousands of landlords have been placing residential property investments into limited company shells since the consultation was announced in the Autumn statement last November.

Today, the government confirmed only properties worth less than £40,000 along with houseboats and caravans will be exempt the surcharge, regardless of tax wrapper.

Chancellor George Osborne said in his speech, larger landlords would not be exempt the extra charge with many previously speculating that landlords with 15 or more properties may be exempt.

However, today’s policy statement quashed all speculation and said: “Companies purchasing residential property will be subject to the higher rates, including the first purchase of a residential property.”

UK interest rates have been left unchanged again at 0.5% by the Bank of England’s rate-setters.

Eight of the nine rate-setters on the Monetary Policy Committee (MPC) voted for no change, with one voting for a rise.

The Bank rate has been at the record low of 0.5% since March 2009.

A number of economists have been pushing their expectations of the first UK interest rate rise from the end of 2016 into the start of 2017.

The Bank said: “All members agreed that, given the likely persistence of the headwinds weighing on the economy, when Bank rate does begin to rise, it is expected to do so only gradually and to a level lower than in recent cycles.

“This guidance is an expectation, not a promise.”

Ian McCafferty, one of four external members of the MPC, has been voting for a rate rise for several months and had the same view at the latest meeting.

New rules come in on 1 January, which will reduce compensation to £75,000 per account, per institution.

Previously the Financial Services Compensation Scheme (FSCS) protected savings of up to £85,000 per account.

Joint accounts will see protection cut from £170,000 to £150,000.

The maximum compensation across the European Union is set at €100,000, and the British level was reduced as a result of the pound gaining strength against the euro.

You are reminded that you may need to move some of your cash, to guarantee it will be fully protected in the event of your bank going bust.

The precise rate was set on 3 July 2015.

Bank base rateBank of England votes 8-1 to hold rates at 0.5%

UK interest rates have been left unchanged again at 0.5% by the Bank of England’s rate-setters.

The nine rate-setters on the Monetary Policy Committee (MPC) voted 8-1 for no change, predicting that inflation would stay below 1% until the second half of next year.

Ian McCafferty, one of four external members of the MPC, was the only one to vote for a rate rise.

He also voted for a quarter-point rise at each of the previous four meetings.

It is the 81st meeting in a row at which rates have been left unchanged at 0.5%.

The minutes of the meeting showed policymakers concentrated on the continuing subdued inflation environment.

Inflation as measured by the Consumer Prices Index (CPI) stood at -0.1% in October and the rate-setters predicted it would be slightly positive in November.

The MPC’s job is to keep CPI close to the government’s target of 2.0%.

Last week, the European Central Bank took steps to boost the eurozone economy, cutting its overnight deposit rate and extending its €60bn stimulus programme by six months.

But the Federal Reserve in the US is widely expected to raise rates at its policy meeting next week.