- Kristin Forbes, Monetary Policy Committee member
Despite weak inflation in the UK, the Bank of England officials expect their next decision will be to hike interest rates and now they are focused on timing and a degree of an eventual tightening in policy. Nevertheless, the BoE Governor Mark Carney highlighted that external risks are the main menace to the UK economy, given the two major economies—Europe and Japan, see their economic conditions deteriorating, while geopolitical situation remain difficult. Kristine Forbes, BoE policy maker, while being also concerned about the Euro zone, believes that there is lower probability of recession in the currency bloc. She also appears to be less pessimistic about the global growth projections. BOE policy makers lowered their economic outlook earlier this month due to feeble global expansion as well as the "specter" of stagnation in Europe.
Meanwhile, the number of mortgage approvals dropped on signs the UK housing market continued to cool, the British Bankers' Association reported. British banks approved 37,076 mortgages for house purchase in October, the lowest since May 2013 and compared with 39,127 a month earlier. Approvals were down 16% from the same month last year. Britain's housing market has been cooling since the middle of the year, as tighter lending rules, high prices and the prospect of rate hikes have curtailed buyers' demand.
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