Latest news with #HuwPill
Bloomberg
3 days ago
- Business
- Bloomberg
BOE Officials Defend Diverging Views With Inflation Path Unclear
Bank of England rate-setters defended their wide range of views on the direction of monetary policy as they laid out to lawmakers starkly different opinions on the outlook for inflation. In a hearing with Parliament's Treasury Committee, Governor Andrew Bailey highlighted the 'differences of views' between his closest deputies, pointing to recent dissents from Chief Economist Huw Pill and Deputy Governor Dave Ramsden.
Reuters
4 days ago
- Business
- Reuters
Bank of England's Mann says impact of QT cannot be offset fully
LONDON, June 2 (Reuters) - The Bank of England needs to pay closer attention to the impact of its quantitative tightening programme on monetary and financial conditions now that it is cutting interest rates, BoE policymaker Catherine Mann said on Monday. The British central bank makes a decision on the pace at which it reverses its past quantitative tightening once a year, with a next decision due in September. "Now that the MPC is reducing restrictiveness, I believe that we need to consider the differing effects of our policies on different parts of the yield curve and their effects on monetary policy transmission as a more salient issue," Mann said in the text of remarks released by the central bank. Mann is due to deliver the remarks at a conference hosted by the U.S. Federal Reserve later on Monday. Last month, Mann and BoE chief economist Huw Pill voted to keep interest rates on hold at 4.5% rather follow the majority decision to cut rates to 4.25%, due to their concerns about persistently high inflation.
Daily Mail
23-05-2025
- Business
- Daily Mail
Two mortgage lenders increase prices as Barclays makes gloomy interest rate forecast
Barclays has revised its interest rate forecasts following Wednesday's disappointing inflation figures, while two other lenders have increased their mortgage rates. The bank says it no longer expects the Bank of England to cut rates in June and now sees the base rate reaching 3.5 per cent in February 2026. It had previously forecast that this would happen by the end of this year. Inflation jumped more than economists expected to 3.5 per cent in April driven by a huge hike in household bills, Office for National Statistics data this week revealed. Jack Meaning, chief UK economist at Barclays said the inflation figure 'surprised us to the upside' and that its forecast was now more in line with the Bank of England's own expectations. 'We... do not think that a sufficient undershoot of inflation will be realised to motivate a cut in June,' he added. Meaning also noted that the tone from the Bank's policymakers since May's decision had been decidedly cautious. Speaking at Barclays' offices in London this week, Huw Pill, chief economist at the Bank of England reportedly made clear that his preferred pace of lowering interest rates would be slower than once every three months. Despite Pill's preference, Barclays predicts the Bank of England will continue to cut interest rates once every three months going forward. However, its analysts also believe that if the economy struggles more than expected this could result in faster cuts. Meaning added: 'We expect a quarterly pace to remain the baseline beyond June, leading to 25bps cuts in August and November this year. 'However, were we to see a more meaningful deceleration of economic activity or inflation relative to our baseline forecast – either because the economy is weaker than we currently assess or because the stimulus we expect over the remainder of this year is not delivered – then cutting to neutral would not be sufficient, in our view, raising the risk of further cuts being required.' Mortgage rates increased by two lenders The changing forecast is resulting in some mortgage lenders now increasing rates, following weeks of steady cuts. Both Santander and Nationwide Building Society have today announced mortgage rate increases. Santander says it is increasing fixed rates by up to 0.1 percentage points from Tuesday next week. Meanwhile, Nationwide has today increased its mortgage rates by up to 0.25 percentage points. The announcements have likely been made in response to rising swap rates. A swap is an agreement in which two banks agree to exchange a stream of future fixed interest payments for another stream of variable ones, based on a set price. These swap rates are influenced by long-term market projections for the Bank of England base rate, as well as the wider economy, internal bank targets and competitor pricing. In aggregate, swap rates create a benchmark that can be looked to as a measure of where the market thinks interest rates will go. Two-year and five-year swaps have risen by about 0.3 percentage points over the past couple of weeks. Two-year swaps are currently at 3.83 per cent and five-year swaps are at 3.86 per cent. Best mortgage rates and how to find them Mortgage rates have risen substantially over recent years, meaning that those remortgaging or buying a home face higher costs. That makes it even more important to search out the best possible rate for you and get good mortgage advice. Quick mortgage finder links with This is Money's partner L&C > Mortgage rates calculator > Find the right mortgage for you To help our readers find the best mortgage, This is Money has partnered with the UK's leading fee-free broker L&C. This is Money and L&C's mortgage calculator can let you compare deals to see which ones suit your home's value and level of deposit. You can compare fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes. If you're ready to find your next mortgage, why not use This is Money and L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you.
The Independent
22-05-2025
- Business
- The Independent
It's all over for interest rate cuts – get your new mortgage deal now
The shock jump in inflation recorded in April looks to have killed off prospects for more interest rate cuts and put the mortgage market into the cooler. As I wrote yesterday, the consumer prices index surging to 3.5 per cent (economists were expecting 3.3) means the City is now pencilling in just one more rate cut over the next year. Previously the expectations were for two, and maybe more. The markets had already started to move in a negative direction after traders took note of Bank of England chief economist Huw Pill's hawkish recent speech. In it, he voiced fears that rates were not high enough to keep a lid on inflation. It wouldn't take much for the swing voters on the rate-setting Monetary Policy Committee to move into the hawks' camp after what the Consumer Prices Index had to show. Where does this leave people trying to navigate the choppy seas of Britain's housing market, in which mortgage deals below the 4 per cent level have been available, albeit only to those seeking to borrow a maximum of around 60 per cent of their home's value? Well, it's not ideal. Lenders had been reducing rates in the wake of the good news on inflation during the two months before April. Now the script has flipped, they'll inevitably start to look at moving in the opposite direction. That's where the interest rate swaps market, which governs the price of fixed deals, is going. Nick Mendes from broker John Charcol explains it like this: 'Swap rates, which heavily influence the pricing of fixed-rate mortgages, have been edging up in recent days and I expect we will see further increases as markets reassess the likely path for monetary policy. 'For mortgage borrowers, this matters. We've seen lenders reduce rates over recent weeks on the assumption that base rates would begin falling steadily. But that trend could now pause or even reverse.' Gilt yields – the rate the government pays when it issues IOUs – have also headed north, adding to the pressure on lenders. Mendes nonetheless thinks that while some will reprice 'modestly upwards to reflect rising funding costs and shifting expectations' others may hold off, at least for a while. However, we're unlikely to see any juicy headline-grabbing new deals, and certainly none below the four per cent level. Lenders that might have been preparing to join the party will put them in mothballs until sentiment improves. This will likely feed through into the wider housing market. There are various indices monitoring prices. At least one of those (Nationwide's) showed prices falling in April, although Halifax's rival measure reported a small increase. Nationwide's reported fall can partly explained by the fact that the stamp duty rise imposed by Rachel Reeves, who is in a nasty fiscal jam, took effect in April. By the way, I wouldn't be at all surprised to see a further increase announced in the autumn given the latest (dreadful) borrowing figures. Reeves will have to do something if she is to stick to her fiscal rules. The affordability of homes in this country is already stretched. Prices are frankly ridiculous, especially in the southeast. More expensive mortgages will make it worse, potentially taking still more heat out of the market. Every cloud has a silver lining, I suppose. But remember this: sentiment can turn on a dime. It was only a couple of weeks ago that people were excitedly talking about multiple rate cuts. If the next set of inflation figures come in below expectations (it is expected to remain elevated at least for the next few months), it could reignite hopes of more rate cuts, which would feed through to the swaps market and from there to the people who oversee the pricing of home loans. Bad economic data could have a similar effect. This may encourage people to sit on their hands. I would, however, caution them against doing that. What I've learned through watching and writing about financial markets for 25 years is this: trying to call the markets is a mug's game. Even the professionals, paid vast amounts of money to roll dice in the financial casino, regularly get it wrong – sometimes with disastrous results. You and I shouldn't even try. See something you like in the estate agent's window that you can afford? Dive in. Shop around, grab the best deal you can find, and jump. People like the estimable Mr Mendes and his colleagues can offer advice, and that's often a good idea too. When lenders make offers, they typically hold to them even when they're in the process of repricing, as some of them doubtless are. Given that the best deals might not last long, it would be best to strike while the iron is hot.
Zawya
22-05-2025
- Business
- Zawya
Pound holds near three-year high on trade optimism
The British pound dipped slightly against the dollar but remained close to its highest level since 2022 reached the day before as hot inflation and improving relations with Europe and the U.S. continued to support the currency. The pound was last down 0.1% against the dollar at $1.3399, having touched a high of $1.3468 on Wednesday, its strongest level in over three years. Britain has recently looked to improve relations with the U.S. and the European Union, becoming the first nation to sign a deal with the U.S. after President Trump's reciprocal tariffs, and agreeing its biggest reset of trade and defence ties with the EU since Brexit this week. "The trade deals are generally good news for the pound," said ING FX strategist Francesco Pesole. "We still think the pound is in a pretty good position." Sterling was up 0.1% against at 84.2 pence per euro . A downturn in business activity for British firms eased this month, the S&P Global UK Composite Purchasing Managers' Index (PMI) showed on Thursday, as businesses grew a little cheerier about the outlook, including fewer worries about the impact of higher U.S. tariffs. The British currency has also been supported this week by hot inflation data, which might lower the prospect of rates cuts from the Bank of England. The BoE's chief economist Huw Pill said this week that a quarterly pace of cuts was "too rapid" given still strong wage pressures on inflation. "There's a bit of dissent building at the Bank of England," ING's Pesole noted. The British central bank lowered interest rates by a quarter point to 4.25% on May 8 in a three-way split vote, with two members of the Monetary Policy Committee favouring a bigger cut, and two - including Pill - preferring a hold. (Reporting by Samuel Indyk, editing by Ed Osmond)
