Bank Rate on hold, but markets expect May hike
The Bank of England's "emergency" policy of ultra-low interest rates marked its second birthday yesterday when the Bank's Monetary Policy Committee voted for the 24th month to leave rates on hold, and also to keep the £200bn programme of quantitative easing unchanged. The apparent calmness of policy, however, belies what the Bank admits is an "unusually wide range of views" on the MPC, which split four ways in January.
The decision came as further evidence emerged of a strengthening in the manufacturing sector of the economy. Market expectations of a rise of 0.25 percentage points in Bank Rate to 0.75 per cent at the May MPC meeting hardened yesterday, as by then GDP in the first quarter of 2011 will be known, as will the contents of the 23 March Budget. Much attention will focus on the minutes of the MPC session, to be published in 10 days' time.
The Office for National Statistics said yesterday that its index of production showed that manufacturing output rose by 1 per cent in January, more than compensating for December's 0.1 per cent drop. Industrial production more widely, which includes North Sea oil and gas, rose by a smaller 0.5 per cent, reflecting the way households cut back their energy usage after the extraordinarily cold winter. Year on year, manufacturing activity was 6.8 per cent higher than a year ago – the best growth rate since 1994.
Graeme Allinson, the head of manufacturing at Barclays Corporate, said: "It remains somewhat disappointing that we are still seeing little in the way of major capital expenditure or M&A activity amongst Britain's manufacturing sector this year."
Yet the service sector – comprising 70 per cent of the economy – remains much weaker by most accounts. The National Institute for Economic and Social Research, a well-respected independent body, said yesterday that output in the economy more broadly rose a little in February, and by 0.2 per cent in the three months ending in February. However,"the underlying quarterly growth rate of the economy remains below its trend and the output gap is likely to be widening".
EastEnders Christmas specials are known for their shouty, over-the-top soap drama but tonight the show has done itself proud thanks to Danny Dyer.
- 1 Planes go hybrid-electric in important step to greener flight
- 3 British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
- 4 Hip hop is both racial and political, and for Iggy Azalea to suggest otherwise is insulting
- 5 Man hospitalised with pneumonia after downing eggnog at office Christmas party
Antonio Martin shooting: Black teenager may have tried to ambush patrolman, says police officer's lawyer
Orphan kangaroos spend Christmas without their parents
Northern Lights above Britain: Stunning Aurora Borealis illuminates Northumberland sky on Christmas Eve
New route to Mars could make manned mission much cheaper and easier
Isis 'did not shoot down Jordan war plane' before capturing pilot, says US
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Alex Salmond has 'broken his word to the Scottish people' says Scottish Lib Dem leader
iJobs Money & Business
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...