BoE's Bailey says important not to cut rates 'too quickly or by too much'
"It remains important that we do not cut bank rate too quickly or by too much," Bailey said at a press conference, adding that he expected higher inflation in recent months to be short-lived.
"There are good reasons to think that this rise in headline inflation will not persist."
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Reuters
20 minutes ago
- Reuters
BOJ debated chances of resuming rate hikes, July summary shows
TOKYO, Aug 8 (Reuters) - Bank of Japan policymakers debated the likelihood of resuming interest rate increases with one signaling the chance of a hike this year, a summary of opinions at the July meeting showed, highlighting receding pessimism over the impact of U.S. tariffs. Some in the board also warned of mounting inflationary pressure in a hawkish tilt underscoring a growing view within the central bank that conditions for raising Japan's still-low borrowing costs could fall into place in coming months. At the July 30-31 meeting, the BOJ kept rates steady at 0.5% but revised up its inflation forecasts and offered a less gloomy outlook on the economy than three months ago, keeping alive market expectations for a rate hike this year. While several board members warned of lingering uncertainty over the fallout from U.S. tariffs, one welcomed Japan's trade deal with the U.S. as "great progress" that heightened the likelihood of achieving the BOJ's forecast, the summary showed on Friday. The BOJ needed "at least two to three more months" to assess the impact of U.S. tariffs, another opinion showed, adding the impact on Japan's economy could remain "minimal" if the U.S. economy withstands the hit better than initially thought. "In that case, it may be possible for the Bank to exit from its current wait-and-see stance, perhaps as early as the end of this year," the member, whose identity was not disclosed, was quoted as saying. A few others in the nine-member board also signaled the possibility of resuming interest rate hikes. The BOJ must continue to raise rates when possible because its policy rate, at 0.5%, is below levels considered neutral to the economy, one opinion showed, adding that the bank should not become overly cautious and "miss the opportunity" to hike. "It's important to raise rates in a timely manner" to avoid being forced to hike rapidly later and inflict huge damage to the economy, another opinion showed. Some warned of growing inflationary risks, with one opinion saying the BOJ is "now at a phase where it needs to place more emphasis on the upside risks to prices", the summary showed. "Inflation expectations seem to have reached 2% and there's concern they will rise further," another opinion showed. The member added that compared with April, there was a bigger chance Japan will durably hit the BOJ's price target in the first half of the three-year projection through fiscal 2027. The caution over inflation risks was in line with a quarterly outlook report released after the July meeting, where the BOJ spelled out explicitly for the first time the risks of persistent food price rises fanning broad-based inflation. The hawkish views contrast with the focus on downside growth risks in the BOJ's previous report on May 1, released in the wake of Trump's April announcement of sweeping U.S. tariffs that stoked fears of global recession. The change in tone underscores the BOJ's growing confidence over Japan's economic recovery thanks to Tokyo's trade deal with Washington last month, which would lower levies for imports of goods, including its mainstay automobiles. A Reuters poll last month showed a majority of economists expect another rate hike by year-end.
Reuters
an hour ago
- Reuters
Trump's Fed pick, Bank of England's 'hawkish' cut weigh on dollar
SINGAPORE, Aug 8 (Reuters) - The dollar was under pressure on Friday and was on course for a weekly fall as U.S. President Donald Trump's temporary choice for a fill-in Federal Reserve Governor stoked expectations for a dovish pick to replace chair Jerome Powell when his term ends. Sterling hovered near a two-week high, clinging to Thursday's sharp gains as the Bank of England cut interest rates but only after a narrow 5-4 vote, which showed the central bank's easing bias lacked conviction. Meanwhile, Trump's decision to nominate Council of Economic Advisers Chairman Stephen Miran to serve on a newly vacant seat at the Fed, while White House seeks a permanent addition, weighed on the dollar. Miran replaces Governor Adriana Kugler following her surprise resignation last week. "While we expect Miran to advocate for lower interest rates, we do not consider he will push the FOMC to cut the Funds rate if the data does not support a cut," said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia. "Depending on the president's perception of his performance, he may also be a contender to replace Chair Powell when his term ends in May." Trump has repeatedly criticised Powell for not cutting interest rates, and while he has backed off threats to oust Powell before his term ends on May 15, has accelerated the search for a replacement. Fed Governor Christopher Waller is emerging as a top candidate to be the next chair, Bloomberg news reported on Thursday. Against a basket of peers, the dollar is down nearly 0.7% on the week so far as concerns over softening U.S. economic momentum, especially in the labour market, boosted hopes of Fed rate cuts. The dollar index was last at 98.04 in early trading on Friday. The Japanese yen was flat at 147.07 per dollar. Adam Grotzinger, senior fixed income portfolio manager at Neuberger Berman, expects four consecutive rate cuts from the Fed totalling 100 basis points, starting later this year and finishing early next year. "When we're looking at economic data, don't be surprised by softer prints coming in on the economy in Q3," Grotzinger said. "That said, for the full year we expect kind of an okay growth, but slower than the last couple years." Traders are pricing in a 93% chance of a rate cut in September with at least two rate cuts priced in by the end of the year. Atlanta Fed president Raphael Bostic said on Thursday that while risks to the job market have increased, it remains too soon to commit to rate cuts with more data lined up ahead of the Fed's policy review scheduled for September 16-17. The BOE's split vote on Thursday showed policymakers remained concerned about still high inflation, even as it cut rates. The pound was nearly flat at $1.3439 on Friday, holding the previous session's gains and on course to clock its best weekly performance since late June. The vote-split in the BoE meeting "implies one of the most hawkish versions of a 25bp cut that reasonable could have been expected," analysts at Goldman Sachs said. Elsewhere, the euro was perched near a two-week high as investors found comfort in the prospect of talks between the U.S. and Russia aimed at ending the war in Ukraine. Russian President Vladimir Putin and U.S. President Donald Trump will meet in the coming days, Kremlin aide Yuri Ushakov said on Thursday. This would mark the first summit between leaders of the U.S. and Russia since June 2021. With the Kremlin announcing summit plans, "geopolitics are in the spotlight and likely to be the major driver of FX markets heading into the weekend," analysts at ANZ wrote in a Friday note.
Daily Mail
2 hours ago
- Daily Mail
Jodie Kidd makes rare public appearance with her lookalike son Indio, 13, as they attend the Space NK London launch party
Jodie Kidd made a rare public appearance with her son Indio while attending the opening of Space NK's new Oxford Street store in London on Thursday. The English fashion model, 46, was joined by her 13-year-old son, whom she shares with her ex-partner, former Argentinian polo player Andrea Vianini, at the event, held at the site previously occupied by Topshop. The proud mum put one arm around her son as the pair posed for the cameras ahead of the star-studded launch party. For the outing, Jodie looked effortlessly chic in a structured aqua blue blazer adorned with gold buttons. She teamed the stylish blazer with a classic black top and light blue slim-fit denim jeans. To complete her look, the beauty sported a pair of purple loafers with tassel detailing and toted her essentials in a mini black backpack. The 46-year-old English fashion model looked effortlessly chic in a structured aqua blue blazer adorned with gold buttons at the event, held at the former Topshop location Meanwhile, her son Indio sported a black hoody with skull and butterfly graphic prints and faded blue denim jeans. He completed his look with a pair of white Nike trainers as he beamed alongside his mum. Beauty retailer Space NK opened its huge new West End flagship store on Oxford Street on Thursday, in the space once occupied by Philip Green's store. The 4,600 sq ft superstore at 214 Oxford Circus is the company's biggest outlet yet. The store, set on one floor, will feature Space NK's new 'beauty experience concept' and stock its entire range of luxury beauty and skincare brands. Space NK previously promised the London flagship would allow customers 'to explore the very best that beauty has to offer.' Chief Executive Andy Lightfoot told Cosmetics Business earlier this year: 'With our active customer base now reaching two million and our growth continually outperforming the market at over 30%, 'We saw that now was the time to answer our customers' demand for a true flagship in the West End. 'Oxford Street is one of the preeminent shopping destinations in the world, and 214 Oxford Circus in particular is an iconic store. An iconic location for our new central London flagship store. He added: 'The mission with our flagship to push boundaries once again on what can be achieved with an instore shopping experience – and another page in the story of Space NK, as well celebrate 30 years a leading British beauty retailer.' Space NK was founded in 1991 by entrepreneur Nicky Kinnaird, whose initials gave the company its name, with its first store opening in Covent Garden in 1993. It is now owned by investor Manzanita Capital. In May last year, Sky News reported the chain was exploring a sale and had appointed investment bankers to manage the process, valuing it between $374 million and $500 million.
