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| Bank of England plays down interest rate rise speculation | Bank of England plays down interest rate rise speculation |
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| The Bank of England appeared to quash speculation of an early rise in interest rates, leaving its growth and inflation forecasts unchanged. | The Bank of England appeared to quash speculation of an early rise in interest rates, leaving its growth and inflation forecasts unchanged. |
| Policymakers at Threadneedle Street used the Bank's latest quarterly inflation report to signal that it remained in no rush to raise rates, with the first rise expected around the time of the general election in the second quarter of 2015. Bank rate has been on hold at the all-time low of 0.5% since March 2009 and the governor Mark Carney said on Wednesday any rate rises would be "gradual and limited". | Policymakers at Threadneedle Street used the Bank's latest quarterly inflation report to signal that it remained in no rush to raise rates, with the first rise expected around the time of the general election in the second quarter of 2015. Bank rate has been on hold at the all-time low of 0.5% since March 2009 and the governor Mark Carney said on Wednesday any rate rises would be "gradual and limited". |
| The report said it was not yet clear whether the recovery was on a sustainable footing. The forecasts showed members of the rate-setting monetary policy committee still believe there is 1-1.5% of spare capacity in the economy to be used up, following the UK's below-par performance at the onset of the crisis in 2008. | The report said it was not yet clear whether the recovery was on a sustainable footing. The forecasts showed members of the rate-setting monetary policy committee still believe there is 1-1.5% of spare capacity in the economy to be used up, following the UK's below-par performance at the onset of the crisis in 2008. |
| "At home, the main downside risk is that the pickup in growth proves to be unsustainable, either because productivity and real incomes continue to disappoint, or because business investment does not recover as expected. | "At home, the main downside risk is that the pickup in growth proves to be unsustainable, either because productivity and real incomes continue to disappoint, or because business investment does not recover as expected. |
| Referring to the May MPC decision to leave rates on hold, the inflation report noted: "The committee judged that there was scope to make further inroads into slack before an increase in Bank rate was necessary." | Referring to the May MPC decision to leave rates on hold, the inflation report noted: "The committee judged that there was scope to make further inroads into slack before an increase in Bank rate was necessary." |
| However, they stressed there was "considerable uncertainty" around the estimate of the amount of slack in the economy, suggesting a range of among committee. | However, they stressed there was "considerable uncertainty" around the estimate of the amount of slack in the economy, suggesting a range of among committee. |
| The Bank left its growth forecast for 2014 unchanged at 3.4%, but revised up its forecast for 2015 to 2.9% from its February forecast of 2.7%. Its forecast for 2016 is unchanged at 2.8%. | The Bank left its growth forecast for 2014 unchanged at 3.4%, but revised up its forecast for 2015 to 2.9% from its February forecast of 2.7%. Its forecast for 2016 is unchanged at 2.8%. |
| On the housing market, the MPC suggested that in the first instance it would be up to colleagues on the financial policy committee to deal with potential signs of a bubble. | |
| "Any potential risks to financial stability emanating from the property market would in the first instance be addressed by the FPC, working with the Financial Conduct Authority and the Prudential Regulation Authority." Risks will be discussed at next month's FPC meeting. | "Any potential risks to financial stability emanating from the property market would in the first instance be addressed by the FPC, working with the Financial Conduct Authority and the Prudential Regulation Authority." Risks will be discussed at next month's FPC meeting. |
| The Bank's policymakers expected the unemployment rate to fall to 6.7% in the first quarter of 2014, from 6.9% in the three months to February. However, data published by the Office for National Statistics on Wednesday showed the actual jobless rate in the three months to March was 6.8%. | The Bank's policymakers expected the unemployment rate to fall to 6.7% in the first quarter of 2014, from 6.9% in the three months to February. However, data published by the Office for National Statistics on Wednesday showed the actual jobless rate in the three months to March was 6.8%. |
| Over the whole forecast period, to early 2017, the Bank is expecting unemployment to fall faster it was predicting in February. | Over the whole forecast period, to early 2017, the Bank is expecting unemployment to fall faster it was predicting in February. |
| By the first quarter of 2017 the jobless rate is expected to be 5.9%, a sharp downgrade from the 6.3% predicted in February. | By the first quarter of 2017 the jobless rate is expected to be 5.9%, a sharp downgrade from the 6.3% predicted in February. |
| The Bank is more optimistic on the growth outlook than the Office for Budget Responsibility, which provides independent forecasts for the Treasury. At the time of the budget in March, the OBR forecast growth of 2.7% this year, 2.3% in 2015, and 2.6% in 2016. | The Bank is more optimistic on the growth outlook than the Office for Budget Responsibility, which provides independent forecasts for the Treasury. At the time of the budget in March, the OBR forecast growth of 2.7% this year, 2.3% in 2015, and 2.6% in 2016. |