- Mark Carney, BoE Governor
The Bank of England pushed the first hike in interest rates since 2009 further into the future, saying inflation would pick up more slowly than originally predicted. Only one BoE official, Ian McCafferty, voted to raise interest rates this month, while the other eight members on the Monetary Policy Committee opted to keep them at a record-low 0.5%. BoE Governor Mark Carney has previously said a decision on whether to raise interest rates would become clearer around the turn of this year. Economists expect a first interest rate rise by the BoE in the second quarter of 2016.
The BoE downgraded its forecast for economic growth for this year and 2016 and warned emerging markets could struggle with slower growth. The central bank expects the British economy to grow 2.7% this year and 2.5% in 2016, whereas in 2017 GDP is predicted to increase 2.7%. Inflation is projected to pick up over the coming months, but less quickly than projected in August, with inflation hitting the target in about 2 years' time. The central bank said that consumer price growth is likely to stay below 1% until the second half of 2016, due to lower costs for energy, food and other imported products. Moreover, Pound's appreciation since March 2013 is also contributing to the current low inflation rate. Economists expect a first interest rate rise by the BoE in the second quarter of 2016.
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