Latest news with #disinflation
Bloomberg
a day ago
- Business
- Bloomberg
BOE's Breeden Believes UK Labor Market Loosening: Sunday Times
Bank of England's Sarah Breeden believes the UK labor market is loosening, while she sees 'waves of disinflation' continuing, according to an interview the central bank deputy governor for financial stability gave to Sunday Times. Breeden said workers' ability to ask for higher wages and companies' capacity to pay more by increasing prices are both decreasing, the newspaper reported.
Reuters
a day ago
- Business
- Reuters
BoE's Breeden sees loosening labour market and disinflation, Sunday Times reports
MANCHESTER, England, May 31 (Reuters) - Bank of England Deputy Governor Sarah Breeden highlighted a weakening labour market and slow economic growth in an interview published on Saturday, adding that "waves of disinflation are continuing". She told the Sunday Times that the central bank's narrative about continuing interest rate cuts was "not a million miles away from where the market is". Breeden, deputy governor for financial stability, is widely regarded as a centrist on the nine-strong Monetary Policy Committee. In May, she voted with the majority to cut interest rates by 0.25 percentage points, in a three-way split vote where two members voted to hold rates, and another two voted for a larger cut. "The big picture, the landscape on which I'm thinking about policy, is that the waves of disinflation are continuing," Breeden said. "I think the labour market is loosening. We've seen unemployment rise a little bit, and in addition we've got relatively weak growth." She added that she had no pre-determined path for interest rates. Financial markets on Friday priced between two and three more quarter-point interest rate cuts between now and the end of the year, while a Reuters poll of economists published last week pointed to two.
Times of Oman
3 days ago
- Business
- Times of Oman
US dollar weakness opens door for RBI to further cut repo rates by 75bps in 2025: Jefferies
New Delhi: The weakness in the US dollar has created real room for the Reserve Bank of India (RBI) to lower interest rates further by up to 75 basis points (bps) by the end of calendar year 2025, according to a report by global financial services firm Jefferies. The report highlighted that similar trends are visible in other emerging markets as well. Alongside India, Bank Indonesia also has room to ease rates further, thanks to the softening of the US dollar. It stated, "US dollar weakness has created real room to cut rates for both Bank Indonesia and the Reserve Bank of India". For India, the disinflationary trend has become increasingly visible. Consumer price inflation averaged 4.6 per cent in the last financial year and dropped to just 3.2 per cent in April this year, the lowest since July. This fall in inflation has increased expectations of further monetary easing by the central bank. Jefferies says that since Sanjay Malhotra took charge as the new RBI Governor in December, replacing Shaktikanta Das, the central bank has already cut the repo rate by 50 basis points. Malhotra's approach is seen as more dovish, with the market interpreting the inflation trend as positive for equities due to the greater potential for rate cuts under his leadership. It said "The same disinflationary trend is increasingly evident in India, though for now it is interpreted as bullish for equities in terms of the potential for RBI rate cuts under the more dovish RBI Governor Sanjay Malhotra". In its latest Annual Report, RBI projected average inflation of around 4 per cent for the ongoing financial year, which ends in March 2026 (FY26). However, Jefferies' India office believes there is room for an additional 75 basis points of rate cuts by the end of 2025, assuming the current economic and currency conditions persist. This outlook, supported by easing inflation and global currency trends, could boost domestic growth and improve the investment climate in the country. The Reserve Bank of India (RBI) in the April Monetary Policy Committee (MPC) meeting had announced a 25-basis-point (bps) cut in the repo rate, reducing it from 6.25 per cent to 6 per cent.
Bloomberg
5 days ago
- Business
- Bloomberg
ECB's Patsalides Sees Bigger Cut Unwarranted Now: Econostream
European Central Bank Governing Council member Christodoulos Patsalides doesn't see a bigger interest-rate reduction as needed at the moment, according to Econostream Media. 'A 50 basis-point cut would only be justified if the risks of recession within the euro area were to intensify, leading to more pronounced cyclical disinflationary pressures,' the Cypriot central-bank chief was cited as saying in an interview published Tuesday. 'However, this is not a highly probable scenario.'
Reuters
6 days ago
- Business
- Reuters
ECB's Villeroy: normalisation of interest rates in euro zone probably not complete
PARIS, May 27 (Reuters) - The normalisation of interest rates in the euro zone is probably not complete, European Central Bank (ECB) policymaker Francois Villeroy de Galhau said on Tuesday. "This normalisation is probably not complete, and we are likely to see this at our governing council next week," Villeroy - who is also head of the Bank of France - said in a speech. The ECB's governing council, which sets monetary policy for the euro area, is scheduled to meet on June 5, with financial markets expecting that it would lower its key deposit facility rate to 2.00% from 2.25%. Such a move would mark the ECB's eighth rate cut in a row, reflecting concerns about subdued economic activity and the taming of inflation. "The French inflation figure for May, published just this morning at the low level of 0.6%, is yet another very encouraging sign of disinflation in action," Villeroy said.
