Key highlights of the week ended November 6

Source: Dukascopy Bank SA
UK
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.  

Australia
The Reserve Bank of Australia reiterated its view that interest-rate reductions this year and the Aussie Dollar's depreciation are supporting growth, suggesting rates are likely to remain on hold. Nevertheless, the central bank said that recent inflation data provided room to ease monetary policy further if needed. Traders are pricing in a 25% chance of a rate reduction at the December meeting, climbing to an almost 60% in February. 

Japan
Bank of Japan Governor Haruhiko Kuroda reassured that the central bank would not hesitate to adjust monetary policy if needed to achieve 2%  inflation target. Even though the slowdown in emerging markets, particularly in China, affected Japan's exports and production, Kuroda believes that the fundamentals of the world's third biggest economy remain sound and the environment surrounding companies and households has markedly improved. The estimated real economic growth rate for fiscal 2015 was downgraded to 1.2% compared with the expected 1.7% in the July 2015 Outlook Report. 

Euro zone
The European Central Bank said that its bank lending and asset-buying programmes have significantly improve credit conditions in the Euro zone and supported the ongoing recovery in lending activity. The programmes have increased the size of the central bank's balance sheet and has raised the money supply. Both programmes reduced banks' funding costs, incentivising them to pass on the cost relief to final borrowers. Such a development should underpin the recovery in lending and economic activity, pushing inflation up to the ECB's goal in the medium term.

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