Bank of England minutes to give clue on rate hike – London Report
INCREASED rhetoric from the Bank of England suggesting an interest rate hike could come soon has sparked extra interest in this week’s minutes of the latest Monetary Policy Committee meeting.
The minutes, out on Wednesday, will give clues as to how many MPC members are likely to vote for an interest rate before the end of the year.
Howard Archer, of IHS Global Insight, said: “It seems unlikely that any of the nine MPC members actually voted for an interest rate hike in July given that at the time of the meeting (8-9 July), the Greek crisis was at its height and there were uncertainties as to just how much the UK could be affected if Greece left the Eurozone.
“Additionally, chancellor George Osborne unveiled his summer Budget on 8 July, and the MPC would not have had time to fully contemplate as to how the various measures announced could affect the economic outlook.”
While MPC members Martin Weale and Ian McCafferty have been close to voting for a rate hike from 0.50 per cent to 0.75 per cent, more dovish members appear to be swaying.
David Miles said recently: “I think the case for beginning a gradual normalisation in the stance of monetary policy is stronger than at any time since I joined the committee over six years ago.”
Public finance figures, due tomorrow, are expected to show net borrowing excluding banks narrowed to £8.5bn in June from £10.4bn in June 2014. Total borrowing is expected to have narrowed to £7.8bn in June 2015 from £9.7bn in June 2014.
Retail sales figures, due Thursday. are likely to show that sales volumes rose by 0.4 per cent month-on-month in June and 4.8 per cent year-on-year.
The corporate calendar starts with news today from Schroder Real Estate Investment Trust and WH Ireland.
Tomorrow, IG Group Holdings and PZ Cussons give final figures, and National Grid, Norsk Hydro, Royal Mail and Verizon Communications will also update the market.
On Wednesday Great Eastern Energy, Ideagen and Tungsten give annual results, while ARM Holdings, DFS Furniture, Entu, Morgan Advanced Materials and Sage Group will also report. Land Securities and Paypoint are set to give interim management statements.
On Thursday Kingfisher, Premier Foods, SABMiller and Shire will give figures, followed by Anglo American, Beazley, Close Brothers Group, Marston’s and Vodafone on Friday.