On Nov. 3, 2022, the Bank of England followed the U.S. Federal Reserve by codifying the eighth consecutive benchmark bank rate hike by 75 basis points (bps). The increase brings the United Kingdom’s main lending rate to 3%, after a majority of the Monetary Policy Committee (MPC) members voted in favor of the 75bps increase.
Seven out of nine MPC members voted in favor of a 75bps rate hike, while two MPC members voted for lower increases. According to the MPC, one member wanted a 50bps hike, while another voted for a 25bps increase. The Bank of England’s rate hike on Thursday was the largest jump in 33 years or since 1989, and the MPC expects more rate increases will be required to tame inflation.
“The majority of the Committee judges that, should the economy evolve broadly in line with the latest Monetary Policy Report projections, further increases in Bank Rate may be required for a sustainable return of inflation to target, albeit to a peak lower than priced into financial markets,” the MPC explained on Thursday.
The news follows the Fed’s rate hike the day prior, when the U.S. central bank raised the rate by 75bps on Wednesday. At first, global markets took the Fed’s announcement as positive news, but Fed chair Jerome Powell’s commentary with the press that followed soon after, changed the mood. Powell remarked that the Fed anticipates “that ongoing increases will be appropriate” and he further stressed that “it is very premature, in my view, to think about or be talking about pausing our rate hikes.”
Members of the Bank of England, the MPC, and economists think that the growth projections for the United Kingdom look dismal. The MPC noted on Thursday that things currently look “very challenging” for the U.K.’s economy. Similar to the U.S. central bank’s goals, the Bank of England is attempting to bring inflation down back to the 2% target. The U.K. and London-listed gilts (bonds) saw some gains after the announcement, while the British pound sterling slid 1.84% against the U.S. dollar.
“For the current November forecast, and consistent with the Government’s announcements on 17 October, the MPC’s working assumption is that some fiscal support continues beyond the current six-month period of the Energy Price Guarantee (EPG), generating a stylised path for household energy prices over the next two years,” the MPC explained in the committee’s announcement.
Recent data shows the U.K.’s inflation rate reached a high at 10.1% in September, while the European Union’s (EU) inflation rate tapped 9.9%. Furthermore, similar to the EU’s lending rates, the U.K.’s mortgage rates have climbed significantly. A 15-year mortgage in the U.K. is 6.154%, while a 30-year mortgage rate is 7%. The Bank of England’s repo rate and the London Interbank Offered Rate (LIBOR) are the main influencing rates that affect lending vehicles across the U.K.
The MPC believes the EPG could curb or augment inflationary pressures tied to the energy sector. “Such support would mechanically limit further increases in the energy component of CPI inflation significantly, and reduce its volatility,” the MPC concluded on Thursday. “However, in boosting aggregate private demand relative to the August projections, the support could augment inflationary pressures in non-energy goods and services.”
In addition to the MPC’s commentary, Bank of England governor Andrew Bailey told the press the central bank can’t make promises when it comes to future rate hikes. “We can’t make promises about future interest rates, but based on where we stand today we think Bank Rate will have to go up by less than currently priced in financial markets,” Bailey told the press after the 75bps rate hike. In terms of fighting inflation, Bailey added:
If we do not act forcefully now it will be worse later on.
What do you think about the U.K.’s Monetary Policy Committee and the Bank of England choosing to raise the benchmark bank rate by 75bps? Let us know what you think about this subject in the comments section below.
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
NFT Sales Volume Saw a Small Uptick This Week — Moonbirds, Mutant Apes Take Top Sales
Non-fungible token (NFT) sales saw a small uptick over the last week as $658.4 million in NFT sales were recorded, up 3.35% in seven days. Out of 15 blockchains, Polygon-based NFT sales saw the largest increase in volume, jumping 106.68% ... read more.
On Nov. 3, 2022, the Bank of England followed the U.S. Federal Reserve by codifying the eighth consecutive benchmark bank rate hike by 75 basis points (bps). The increase brings the United Kingdom’s main lending rate to 3%, after a majority of the Monetary Policy Committee (MPC) members voted in favor of the 75bps increase.
Seven out of nine MPC members voted in favor of a 75bps rate hike, while two MPC members voted for lower increases. According to the MPC, one member wanted a 50bps hike, while another voted for a 25bps increase. The Bank of England’s rate hike on Thursday was the largest jump in 33 years or since 1989, and the MPC expects more rate increases will be required to tame inflation.
“The majority of the Committee judges that, should the economy evolve broadly in line with the latest Monetary Policy Report projections, further increases in Bank Rate may be required for a sustainable return of inflation to target, albeit to a peak lower than priced into financial markets,” the MPC explained on Thursday.
The news follows the Fed’s rate hike the day prior, when the U.S. central bank raised the rate by 75bps on Wednesday. At first, global markets took the Fed’s announcement as positive news, but Fed chair Jerome Powell’s commentary with the press that followed soon after, changed the mood. Powell remarked that the Fed anticipates “that ongoing increases will be appropriate” and he further stressed that “it is very premature, in my view, to think about or be talking about pausing our rate hikes.”
Members of the Bank of England, the MPC, and economists think that the growth projections for the United Kingdom look dismal. The MPC noted on Thursday that things currently look “very challenging” for the U.K.’s economy. Similar to the U.S. central bank’s goals, the Bank of England is attempting to bring inflation down back to the 2% target. The U.K. and London-listed gilts (bonds) saw some gains after the announcement, while the British pound sterling slid 1.84% against the U.S. dollar.
“For the current November forecast, and consistent with the Government’s announcements on 17 October, the MPC’s working assumption is that some fiscal support continues beyond the current six-month period of the Energy Price Guarantee (EPG), generating a stylised path for household energy prices over the next two years,” the MPC explained in the committee’s announcement.
Recent data shows the U.K.’s inflation rate reached a high at 10.1% in September, while the European Union’s (EU) inflation rate tapped 9.9%. Furthermore, similar to the EU’s lending rates, the U.K.’s mortgage rates have climbed significantly. A 15-year mortgage in the U.K. is 6.154%, while a 30-year mortgage rate is 7%. The Bank of England’s repo rate and the London Interbank Offered Rate (LIBOR) are the main influencing rates that affect lending vehicles across the U.K.
The MPC believes the EPG could curb or augment inflationary pressures tied to the energy sector. “Such support would mechanically limit further increases in the energy component of CPI inflation significantly, and reduce its volatility,” the MPC concluded on Thursday. “However, in boosting aggregate private demand relative to the August projections, the support could augment inflationary pressures in non-energy goods and services.”
In addition to the MPC’s commentary, Bank of England governor Andrew Bailey told the press the central bank can’t make promises when it comes to future rate hikes. “We can’t make promises about future interest rates, but based on where we stand today we think Bank Rate will have to go up by less than currently priced in financial markets,” Bailey told the press after the 75bps rate hike. In terms of fighting inflation, Bailey added:
If we do not act forcefully now it will be worse later on.
What do you think about the U.K.’s Monetary Policy Committee and the Bank of England choosing to raise the benchmark bank rate by 75bps? Let us know what you think about this subject in the comments section below.
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
NFT Sales Volume Saw a Small Uptick This Week — Moonbirds, Mutant Apes Take Top Sales
Non-fungible token (NFT) sales saw a small uptick over the last week as $658.4 million in NFT sales were recorded, up 3.35% in seven days. Out of 15 blockchains, Polygon-based NFT sales saw the largest increase in volume, jumping 106.68% ... read more.
Polygon rose to its highest level since August, as the token climbed by as much as 10% on Thursday. Today’s rise comes despite cryptocurrency markets mainly residing in the red, with the global market cap down 0.41% as of writing. Flow was another notable expectation to today’s declines, climbing by 14% earlier in the day.
Polygon (MATIC) rose by as much as 10% in today’s session, as the token climbed to its highest point since August.
Following a low of $0.8403 on Wednesday, MATIC/USD rallied to an intraday peak of $0.9813 earlier today.
The move saw the token race to its strongest point since August 15, when it traded at a high of $1.033.
As can be seen from the chart, the 14-day relative strength index (RSI) has also surged, breaking out of a key resistance in the process. The index is currently tracking at the 62.19 level, which is marginally above a ceiling of 60.75.
Should this recent upward momentum continue, bulls will likely look to recapture the $1.00 level. In order to reach this point, MATIC traders will first need to take price strength to a reading of 65.00.
Flow (FLOW) snapped a four-day losing streak in today’s session, as the token raced to a multi-week high.
FLOW/USD surged to a high of $2.04 earlier today, which comes less than a day after hovering at a low of $1.57. Today’s rally in FLOW has led to a breakout of a ceiling at the $1.80 point, which had been in place since mid-September.
The RSI on FLOW has yet to reach a resistance level, with the next visible ceiling at the 65.40 mark.
As of writing, the index is tracking at 63.05, with the 10-day (red) moving average also hovering above its 25-day (blue) counterpart.
Should this trend continue, it is likely that FLOW could hit $2.15 in the coming days.
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Could we see flow hit a ceiling of $2.15 this week? Let us know your thoughts in the comments.
Eliman brings an eclectic point of view to market analysis, he was previously a brokerage director and retail trading educator. Currently, he acts as a commentator across various asset classes, including Crypto, Stocks and FX.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Tony Hawk's Latest NFTs to Come With Signed Physical Skateboards
Last December, the renowned professional skateboarder Tony Hawk released his “Last Trick” non-fungible token (NFT) collection via the NFT marketplace Autograph. Next week, Hawk will be auctioning the skateboards he used during his last tricks, and each of the NFTs ... read more.
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