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You can find the current article at its original source at https://www.theguardian.com/business/live/2016/aug/04/bank-of-england-interest-rates-stimulus-inflation-report-business-live
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| Version 8 | Version 9 |
|---|---|
| Bank of England press conference after interest rates cut - live updates | |
| (35 minutes later) | |
| 1.49pm BST | |
| 13:49 | |
| Santander says it is passing the interest rate on to customers in full: | |
| From the beginning of September 2016, Santander’s Standard Variable Rate will be 4.49%. | |
| The Alliance & Leicester Standard Variable Rate on mortgages will also be reduced by 0.25% to 4.74%. | |
| 1.45pm BST | |
| 13:45 | |
| Jill Treanor | |
| Mark Carney’s stern warning to Britain’s banks to pass on today’s rate cut may have fallen on deaf ears at Royal Bank of Scotland. | |
| Even as the Bank of England governor was telling reporters that there is ‘no excuse’ not to pass the cut on, RBS - bailed out by the taxpayer in 2008 - was quick to announce it had not decided whether to do so yet. | |
| Its NatWest arm has 17% of its customers on standard variable rate [SVR] mortgages. Here’s the statement: | |
| The Bank of England base rate has reduced today from 0.5% to 0.25%. | |
| Existing NatWest customers with Fixed Rate products will not see a change in their rate during their fixed rate period. | |
| We are currently reviewing whether we will make any changes to Variable Rate products and will provide an update in the near future. | |
| For those customers on Base Rate Linked products, we will reduce their rate by 0.25%. | |
| 1.37pm BST | |
| 13:37 | |
| And that’s the end of Mark Carney’s press conference. I’ll pull a summary together shortly. | |
| Former chancellor George Osborne has already given his verdict: | |
| BoE right to use triple whammy of lower official rates, QE & funding scheme to support demand.But only a temporary answer as economy adjusts | |
| Must be matched by permanent supply side reform:lower biz taxes, free trade with EU & unambiguous message we're open to overseas investment. | |
| Updated | |
| at 1.41pm BST | |
| 1.34pm BST | |
| 13:34 | |
| Carney: Can't imagine how helicopter money would help | |
| Q: What’s your view of helicopter money? [IE, trying to stimulate the economy by handing cash directly to the public]. | |
| Mark Carney deploys his most dismissive tone, saying he doesn’t see the merit in the idea...and “cannot conceive” a situation where such a “flight of fantasy” would help the UK. | |
| Carney now channelling Meghan Trainor's No on negative interest rates. 'have been abt as clear as I can be on that' pic.twitter.com/HHSmcp8ReH | |
| 1.31pm BST | |
| 13:31 | |
| Q: Can Mark Carney reassure investors about his commitment to steering the UK economy through the troubled times ahead, by promising to stay until 2021? | |
| [Background: Carney signed up to a 5-year term in 2013, but could potentially serve eight years]. | |
| Carney says it’s an “absolute privilege” to serve at the Bank of England. But he’s been working flat out for months, and hasn’t had a moment to reflect on the issue. | |
| 1.27pm BST | |
| 13:27 | |
| Broadbent: House prices expected to fall next year | |
| Q: What is the Bank of England’s forecast for house prices? | |
| Deputy governor Ben Broadbent says any fan chart on house price would be as wide as any other fan chart it produces (ie, it doesn’t really know). | |
| But the central case is that house prices experience a “small decline” next year, but then pick up again as average wages rise. | |
| 1.23pm BST | 1.23pm BST |
| 13:23 | 13:23 |
| Ben Chu of the Independent tries to bowl Mark Carney out with a great question. | Ben Chu of the Independent tries to bowl Mark Carney out with a great question. |
| He reminds the governor that he was criticised for forecasting a recession if Britain voted to leave the EU, because his forecasts didn’t include a post-Brexit stimulus programme (as we’ve seen today). So, does today’s announcement vindicate them? | He reminds the governor that he was criticised for forecasting a recession if Britain voted to leave the EU, because his forecasts didn’t include a post-Brexit stimulus programme (as we’ve seen today). So, does today’s announcement vindicate them? |
| Carney plays a straight bat (ice hockey stick?), pointing out that the Bank’s ‘fan charts’ show a range of possibilities for growth (including a recession). | Carney plays a straight bat (ice hockey stick?), pointing out that the Bank’s ‘fan charts’ show a range of possibilities for growth (including a recession). |
| Carney not totally ruling out recession. doesn't use r-word but says ppl can look at fan charts, see what may happen beyond the central case | Carney not totally ruling out recession. doesn't use r-word but says ppl can look at fan charts, see what may happen beyond the central case |
| Updated | Updated |
| at 1.23pm BST | at 1.23pm BST |
| 1.23pm BST | 1.23pm BST |
| 13:23 | 13:23 |
| 1.18pm BST | 1.18pm BST |
| 13:18 | 13:18 |
| Carney repeats that banks have ‘no excuse’ not to pass today’s interest rate cut onto customers. | Carney repeats that banks have ‘no excuse’ not to pass today’s interest rate cut onto customers. |
| He adde that he doesn’t want to see UK bank deposit rates fall below zero. | He adde that he doesn’t want to see UK bank deposit rates fall below zero. |
| Quote of day from Mark Carney: “Banks have no excuse for not passing on this rate cut” We may hear one or two excuses in the coming days | Quote of day from Mark Carney: “Banks have no excuse for not passing on this rate cut” We may hear one or two excuses in the coming days |
| 1.16pm BST | 1.16pm BST |
| 13:16 | 13:16 |
| Q: Did you only cut interest rates by a quarter-point because you wanted a unanimous decision? | Q: Did you only cut interest rates by a quarter-point because you wanted a unanimous decision? |
| Carney says the Bank didn’t cut rates deeper, because it was also able to provide stimulus in other ways. | Carney says the Bank didn’t cut rates deeper, because it was also able to provide stimulus in other ways. |
| If the economic data continues to deteriorate, a further rate cut is possible in the months ahead. | If the economic data continues to deteriorate, a further rate cut is possible in the months ahead. |
| 1.13pm BST | 1.13pm BST |
| 13:13 | 13:13 |
| Carney has drawn the battle lines -- with savers on one side, and the unemployed on the other. | Carney has drawn the battle lines -- with savers on one side, and the unemployed on the other. |
| Carney puts the unemployment rate into numbers. 'That's more than a quarter of a million ppl losing their job" | Carney puts the unemployment rate into numbers. 'That's more than a quarter of a million ppl losing their job" |
| 1.12pm BST | 1.12pm BST |
| 13:12 | 13:12 |
| Q: What do you want small savers to do with their money? | Q: What do you want small savers to do with their money? |
| Carney sweeps aside the idea that the Bank of England is treating savers unfairly. | Carney sweeps aside the idea that the Bank of England is treating savers unfairly. |
| Despite this stimulus package, the Bank expects unemployment to rise by 250,000, so it is right to take action now, the governor declares. | Despite this stimulus package, the Bank expects unemployment to rise by 250,000, so it is right to take action now, the governor declares. |
| Should we have more people lose their jobs, to target a different part of the economy? | Should we have more people lose their jobs, to target a different part of the economy? |
| Should we have more uncertainty? | Should we have more uncertainty? |
| We understand the challenge the UK faces... this package lessens the challenge. | We understand the challenge the UK faces... this package lessens the challenge. |
| Carney: more than a quarter of a million people are now forecast to lose their jobs | Carney: more than a quarter of a million people are now forecast to lose their jobs |
| Updated | Updated |
| at 1.12pm BST | at 1.12pm BST |
| 1.08pm BST | 1.08pm BST |
| 13:08 | 13:08 |
| Q: What’s your message to critics who say this package is excessive? | Q: What’s your message to critics who say this package is excessive? |
| This is the appropriate response to the conditions that the UK economy finds itself in, Carney replies. There is a “clear case” to act now, when the economy needs it. | This is the appropriate response to the conditions that the UK economy finds itself in, Carney replies. There is a “clear case” to act now, when the economy needs it. |
| Ben Broadbent, deputy governor, then takes the mike. He points to the latest Markit PMIs, which suggest the economy is now contracting. So it is “not premature” to act now. | Ben Broadbent, deputy governor, then takes the mike. He points to the latest Markit PMIs, which suggest the economy is now contracting. So it is “not premature” to act now. |
| 1.05pm BST | 1.05pm BST |
| 13:05 | 13:05 |
| Asked about the Brexit vote, Mark Carney says that Britain has suffered a “very large” shock. | Asked about the Brexit vote, Mark Carney says that Britain has suffered a “very large” shock. |
| Risks are now manifesting themselves in a wide range of indicators, he adds. | Risks are now manifesting themselves in a wide range of indicators, he adds. |
| Carney says post referendum "an unusual situation" when asked to put it in context. "It's a very large identifiable supply shock" | Carney says post referendum "an unusual situation" when asked to put it in context. "It's a very large identifiable supply shock" |
| 1.01pm BST | 1.01pm BST |
| 13:01 | 13:01 |
| Our economics editor, Larry Elliott, asks Carney about calls for the UK government to boost its infrastructure spending. | Our economics editor, Larry Elliott, asks Carney about calls for the UK government to boost its infrastructure spending. |
| Carney says he has discussed various policy actions with chancellor Philip Hammond, and the Treasury is “fully informed” about the Bank’s thinking, and what it can do to support the economy. | Carney says he has discussed various policy actions with chancellor Philip Hammond, and the Treasury is “fully informed” about the Bank’s thinking, and what it can do to support the economy. |
| 12.57pm BST | 12.57pm BST |
| 12:57 | 12:57 |
| Carney fires a warning shot at the banking sector - they have ‘no excuse’ not to pass this rate cut on. So, expect mortgage rates to fall. | Carney fires a warning shot at the banking sector - they have ‘no excuse’ not to pass this rate cut on. So, expect mortgage rates to fall. |
| Carney: the banks have no excuse not to pass this rate cut on. They should write to their customers and make that clear | Carney: the banks have no excuse not to pass this rate cut on. They should write to their customers and make that clear |
| Updated | Updated |
| at 12.58pm BST | at 12.58pm BST |
| 12.57pm BST | 12.57pm BST |
| 12:57 | 12:57 |
| Q: Could the Bank of England cut interest rates to negative in future? | Q: Could the Bank of England cut interest rates to negative in future? |
| Carney agrees that he’s not a big fan of negative interest rates. Other stimulus options are better. | Carney agrees that he’s not a big fan of negative interest rates. Other stimulus options are better. |
| The BoE still thinks that the ‘zero lower bound’ is just above zero, he adds (meaning rates couldn’t be cut below 0.0%) | The BoE still thinks that the ‘zero lower bound’ is just above zero, he adds (meaning rates couldn’t be cut below 0.0%) |
| Carney asked if we can rule out Negative rates. "I am not a fan of negative interest rates... We have other options to provide stimulus" | Carney asked if we can rule out Negative rates. "I am not a fan of negative interest rates... We have other options to provide stimulus" |
| 12.55pm BST | 12.55pm BST |
| 12:55 | 12:55 |
| Q: What’s your message to savers, who must look at today’s decision and wonder if it’s worth putting any money aside? | Q: What’s your message to savers, who must look at today’s decision and wonder if it’s worth putting any money aside? |
| We think about this all the time, Carney says. But he offers little immediate relief: | We think about this all the time, Carney says. But he offers little immediate relief: |
| Saving rates are probably going to be low for some time, both in the UK and beyond..... | Saving rates are probably going to be low for some time, both in the UK and beyond..... |
| That’s the price of protecting the economy, the governor adds: | That’s the price of protecting the economy, the governor adds: |
| We will ensure for savers, for pensioners, for pension funds.. that the economy will grow, that there are fewer unemployed, and we adjust to this new equilibrium faster than would be the case. | We will ensure for savers, for pensioners, for pension funds.. that the economy will grow, that there are fewer unemployed, and we adjust to this new equilibrium faster than would be the case. |
| Carney's message to savers "Think about a lot, worked hard, done right thing, returns will be low for sometime.." | Carney's message to savers "Think about a lot, worked hard, done right thing, returns will be low for sometime.." |
| Updated | Updated |
| at 1.00pm BST | at 1.00pm BST |
| 12.53pm BST | 12.53pm BST |
| 12:53 | 12:53 |
| Q: Funding constraints aren’t a big problem today, so why have you allocated £100bn to encourage bank lending? | Q: Funding constraints aren’t a big problem today, so why have you allocated £100bn to encourage bank lending? |
| Carney says it’s important to take worries about credit availability off the table. Firms and households should not face the credit constraint suffered after the 2008 financial crisis. | Carney says it’s important to take worries about credit availability off the table. Firms and households should not face the credit constraint suffered after the 2008 financial crisis. |