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| Version 1 | Version 2 |
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| Bank of England interest rate decision - business live | Bank of England interest rate decision - business live |
| (35 minutes later) | |
| 9.52am BST | |
| 09:52 | |
| Mark Carney was dubbed the “outstanding central banker of his generation” when he was surprisingly appointed as BoE governor in late 2012. | |
| And events like today will test Carney’s mettle, as Eric Lonergan, macro investment fund manager at M&G Investments, explains: | |
| “Today’s Monetary Policy Committee meeting is extremely important and the range of potential outcomes is far wider than market commentators are suggesting. This will be the first serious decision Mark Carney has made since becoming Governor – and we will find out whether he is conventional and timid, or innovative and bold. | |
| “The markets are generally expecting a conventional and relatively dull decision: a cut in base rates of 25bps and additional QE. This may be the case but many other outcomes are possible; for example the cut in interest rates could be much more extreme at 75bps, along with the introduction of tiered reserves, as Japan has done. Alternatively, there could be no change in rates but the introduction of a ‘helicopter money’ programme in coordination with the Treasury. | |
| “The effects of the decision could be of global relevance – particularly if there is a major innovation in policy. | |
| 9.43am BST | |
| 09:43 | |
| A few economists are predicting that the Bank of England will resist the clamour to cut interest rates today: | |
| Most dovish BoE forecasts: JP Morgan and 4Cast going for 50 bps rate cut to 0%.Least dovish: BayernLB, Julius Baer, SEB going for no change | |
| 9.25am BST | |
| 09:25 | |
| There’s an edgy calm in the London stock market this morning. | |
| The FTSE 100 index has dropped by a modest 8 points, to 6626, as investors count down towards the Bank of England decision at noon. | |
| Augustin Eden, research analyst at Accendo Markets, says traders are wondering how aggressive the Bank will be today: | |
| Official forecasts are now for a 25bp interest rate cut and no change in the central bank’s QE programme. However many are saying the BoE should throw the kitchen sink at what might after all turn out to be a post-Brexit economic recession, before it happens. | |
| Updated | |
| at 9.26am BST | |
| 9.17am BST | 9.17am BST |
| 09:17 | 09:17 |
| Mark Wilson, the boss of insurance group Aviva, is hoping (in vain) that the BoE leaves interest rates on hold. | Mark Wilson, the boss of insurance group Aviva, is hoping (in vain) that the BoE leaves interest rates on hold. |
| Ahead of expected Bank of England rate cut - Mark Wilson, CEO of Aviva: "“I’m not sure what question the rate cut is trying to answer." | Ahead of expected Bank of England rate cut - Mark Wilson, CEO of Aviva: "“I’m not sure what question the rate cut is trying to answer." |
| Record low borrowing costs are already causing headaches in the financial sector, as they’ve driven down the rate of return on government bonds (which is particularly awkward for pension funds). | Record low borrowing costs are already causing headaches in the financial sector, as they’ve driven down the rate of return on government bonds (which is particularly awkward for pension funds). |
| 9.06am BST | 9.06am BST |
| 09:06 | 09:06 |
| Fred Ducrozet, economist at Swiss bank Pictet, predicts that the Bank of England will launch a major, three-pronged stimulus programme today. | Fred Ducrozet, economist at Swiss bank Pictet, predicts that the Bank of England will launch a major, three-pronged stimulus programme today. |
| He’s forecasting that rates would be slashed to just 0.1%, alongside a new funding for lending push and £50bn of new money pumped into the system via quantitative easing. | He’s forecasting that rates would be slashed to just 0.1%, alongside a new funding for lending push and £50bn of new money pumped into the system via quantitative easing. |
| #BoEguesses 40bp rate cut; extended FLS; £50bn QE (Gilts + corporate) | #BoEguesses 40bp rate cut; extended FLS; £50bn QE (Gilts + corporate) |
| Updated | Updated |
| at 9.06am BST | at 9.06am BST |
| 8.56am BST | 8.56am BST |
| 08:56 | 08:56 |
| A Bloomberg poll of 52 economists has found that 50 expect a quarter-point interest rate cut today: | |
| Updated | |
| at 9.33am BST | |
| 8.46am BST | 8.46am BST |
| 08:46 | 08:46 |
| City investors have already bet against the pound in record numbers, in anticipation of a rate cut today, as this chart from Reuters shows: | City investors have already bet against the pound in record numbers, in anticipation of a rate cut today, as this chart from Reuters shows: |
| Sterling could be poised for a sharp bounce if BoE disappoints today. Speculators holding record short positions: pic.twitter.com/ZfHfLs9snW | Sterling could be poised for a sharp bounce if BoE disappoints today. Speculators holding record short positions: pic.twitter.com/ZfHfLs9snW |
| 8.37am BST | 8.37am BST |
| 08:37 | 08:37 |
| McDonnell: Government must ease fiscal policy now | McDonnell: Government must ease fiscal policy now |
| John McDonnell, Labour’s shadow chancellor, is also predicting an interest rate cut at noon. | John McDonnell, Labour’s shadow chancellor, is also predicting an interest rate cut at noon. |
| He tells the Today Programme that “a small cut is almost inevitable now”, given the worrying signs from the UK economy. | He tells the Today Programme that “a small cut is almost inevitable now”, given the worrying signs from the UK economy. |
| McDonnell backs Danny Blanchflower’s call for a VAT cut, arguing: | McDonnell backs Danny Blanchflower’s call for a VAT cut, arguing: |
| It’s a very creative idea - we need a stimulus like that. | It’s a very creative idea - we need a stimulus like that. |
| But McDonnell insists that the UK economy can’t be healed simply through monetary policy. Fiscal policy (government spending) needs to be deployed too. | But McDonnell insists that the UK economy can’t be healed simply through monetary policy. Fiscal policy (government spending) needs to be deployed too. |
| I want to see the government now looking at its investment stratetegy | I want to see the government now looking at its investment stratetegy |
| Hammond, the chancellor, has said he’s not going reset the government’s fiscal rule or its economic stratedy until the Autumn. And I think that’s too late. We need action now. | Hammond, the chancellor, has said he’s not going reset the government’s fiscal rule or its economic stratedy until the Autumn. And I think that’s too late. We need action now. |
| Businesses are holding off investment decisions because they’re getting the “wrong signals” from government, and we can’t wait until the Autumn Statement to act, McDonnell adds. | Businesses are holding off investment decisions because they’re getting the “wrong signals” from government, and we can’t wait until the Autumn Statement to act, McDonnell adds. |
| He wants to take advantage of Britain’s current record low borrowing costs, to borrow an extra £250bn for investment plus £100bn to fund a National Investment Bank. That Bank could then “lever in” £250bn of private sector cash, to pay for investment projects. | He wants to take advantage of Britain’s current record low borrowing costs, to borrow an extra £250bn for investment plus £100bn to fund a National Investment Bank. That Bank could then “lever in” £250bn of private sector cash, to pay for investment projects. |
| 8.26am BST | 8.26am BST |
| 08:26 | 08:26 |
| Blanchflower: Rate cut is 'almost inevitable' | Blanchflower: Rate cut is 'almost inevitable' |
| Danny Blanchflower, economics professor and former member of the Bank’s monetary policy committee, reckons an interest rate cut is a nailed-on certainty. | Danny Blanchflower, economics professor and former member of the Bank’s monetary policy committee, reckons an interest rate cut is a nailed-on certainty. |
| Speaking to the Today programme, he says: | Speaking to the Today programme, he says: |
| It’s almost inevitable that it will be at least a cut of 25 basis points. The question is will it be more? | It’s almost inevitable that it will be at least a cut of 25 basis points. The question is will it be more? |
| Markets don’t like surprises, and everyone is expecting it. | Markets don’t like surprises, and everyone is expecting it. |
| The data worsened a lot since the last meeting [in July]. So the expectation is, and I’m pretty sure that the members of Committee will sit there and think ‘everyone thinks we’re going to go, I think we’re going to have to’. | The data worsened a lot since the last meeting [in July]. So the expectation is, and I’m pretty sure that the members of Committee will sit there and think ‘everyone thinks we’re going to go, I think we’re going to have to’. |
| Blanchflower also argues that there are similarities with 2008 (when he served on the MPC), when the Bank eased monetary policy dramatically. | Blanchflower also argues that there are similarities with 2008 (when he served on the MPC), when the Bank eased monetary policy dramatically. |
| If the economic data continues to worsen quickly, he says, we could get several episodes of action. | If the economic data continues to worsen quickly, he says, we could get several episodes of action. |
| Q: Could that include negative interest rates? | Q: Could that include negative interest rates? |
| Every other central bank in Europe have negative rates of about 0.5%, and Japan does too. | Every other central bank in Europe have negative rates of about 0.5%, and Japan does too. |
| So it could happen - not at today’s meeting, but I don’t rule it out. | So it could happen - not at today’s meeting, but I don’t rule it out. |
| Blanchflower also believes that the government needs to relax fiscal policy, including cutting VAT by 5 percentage points (from 20% to 15%). | Blanchflower also believes that the government needs to relax fiscal policy, including cutting VAT by 5 percentage points (from 20% to 15%). |
| 8.15am BST | 8.15am BST |
| 08:15 | 08:15 |
| The pound is weakening in early trading, as City traders anticipate an interest rate cut at noon. | The pound is weakening in early trading, as City traders anticipate an interest rate cut at noon. |
| Sterling is down around 0.3% against the US dollar at $1.328. | Sterling is down around 0.3% against the US dollar at $1.328. |
| £/$ volatility surges ahead of #BOE rate decision...market seeing 99% chance of rate cut. pic.twitter.com/KybeiR4nwF | £/$ volatility surges ahead of #BOE rate decision...market seeing 99% chance of rate cut. pic.twitter.com/KybeiR4nwF |
| 8.14am BST | 8.14am BST |
| 08:14 | 08:14 |
| Our economics editor, Larry Elliott, has rummaged around in the Bank of England’s arsenal to find the weapons at its disposal today: | Our economics editor, Larry Elliott, has rummaged around in the Bank of England’s arsenal to find the weapons at its disposal today: |
| They are: | They are: |
| Larry expects a quarter-point cut, plus a new funding for lending scheme and perhaps QE as well. | Larry expects a quarter-point cut, plus a new funding for lending scheme and perhaps QE as well. |
| Related: What are the Bank of England's options for Super Thursday? | Related: What are the Bank of England's options for Super Thursday? |
| 7.36am BST | 7.36am BST |
| 07:36 | 07:36 |
| The Agenda: Bank of England Super Thursday | The Agenda: Bank of England Super Thursday |
| Good morning. | Good morning. |
| Has the moment finally come? For the first time in over seven years, British savers and borrowers could actually see an interest rate cut today, as policymakers try to ward off a recession. | Has the moment finally come? For the first time in over seven years, British savers and borrowers could actually see an interest rate cut today, as policymakers try to ward off a recession. |
| Over in the City of London, the Bank of England is putting the finishing touches to its latest quarterly inflation report. It’s the Bank’s first major policy decision since Britain voted to leave the EU in June, and the stakes are high. | Over in the City of London, the Bank of England is putting the finishing touches to its latest quarterly inflation report. It’s the Bank’s first major policy decision since Britain voted to leave the EU in June, and the stakes are high. |
| Some economists expect the Bank to announce a significant stimulus package today, to response to signs that the UK economy has slowed sharply in the last six weeks | Some economists expect the Bank to announce a significant stimulus package today, to response to signs that the UK economy has slowed sharply in the last six weeks |
| This could include slashing borrowing costs to fresh record lows, down from 0.5%. We could also get a new bout of quantitative easing – creating new money to buy government bonds – and perhaps fresh measures to encourage bank lending as well. | This could include slashing borrowing costs to fresh record lows, down from 0.5%. We could also get a new bout of quantitative easing – creating new money to buy government bonds – and perhaps fresh measures to encourage bank lending as well. |
| As Investec economist Philip Shaw argues: | As Investec economist Philip Shaw argues: |
| “There is enough evidence on the negative shock to the economy that some easing is justified.” | “There is enough evidence on the negative shock to the economy that some easing is justified.” |
| That evidence includes new business surveys showing that the UK economy appears to be shrinking by around 0.4%, as orders drop and confidence wanes. | That evidence includes new business surveys showing that the UK economy appears to be shrinking by around 0.4%, as orders drop and confidence wanes. |
| Related: UK services sector contraction adds to recession fears | Related: UK services sector contraction adds to recession fears |
| This would be the first interest rate cut since the depths of the financial crisis, back in the days when the collapse of Lehman Brothers provoked market mayhem and a global downturn. | This would be the first interest rate cut since the depths of the financial crisis, back in the days when the collapse of Lehman Brothers provoked market mayhem and a global downturn. |
| Global markets have dubbed today as the #BoE’s super Thursday as they expect it to cut its bank rate to 0.25% from the current 0.50% | Global markets have dubbed today as the #BoE’s super Thursday as they expect it to cut its bank rate to 0.25% from the current 0.50% |
| Welcome to Super Thurs: when a entire generation of cherubic financial journalists finally get to write about a Bank of England rate move | Welcome to Super Thurs: when a entire generation of cherubic financial journalists finally get to write about a Bank of England rate move |
| On the other hand.... the Bank might decide to hold fire until September. That would give more time to assess the economic situation, and see how the government responds to the Brexit vote. | On the other hand.... the Bank might decide to hold fire until September. That would give more time to assess the economic situation, and see how the government responds to the Brexit vote. |
| That would disappoint many in the City, and could provoke some wild swings the markets. | That would disappoint many in the City, and could provoke some wild swings the markets. |
| So either way, it’s going to be a pretty dramatic day. The new quarterly inflation report should also be fascinating, as the Bank is likely to slash its growth forecasts following the EU referendum vote. | So either way, it’s going to be a pretty dramatic day. The new quarterly inflation report should also be fascinating, as the Bank is likely to slash its growth forecasts following the EU referendum vote. |
| Here’s the timings: | Here’s the timings: |
| We’ll be tracking all the build-up to the big decision at noon, followed by instant analysis and reaction as the news unfolds. | We’ll be tracking all the build-up to the big decision at noon, followed by instant analysis and reaction as the news unfolds. |
| Updated | Updated |
| at 7.58am BST | at 7.58am BST |