Stubborn inflation has dashed investor hopes that the Bank of England would soon contemplate the introduction of interest rate cuts. “Improving interest rate expectations in recent weeks has led to some forecasters predicting the first cut in the first half of 2024, with lenders slashing mortgage rates as they battle it out to retain their existing clients and attract new business,” Alice Haine, personal finance analyst at Bestinvest explained.

Haine added that this unexpected rapid rise in inflation has come as a blow to mortgage holders and prospective buyers, who had hoped for interest rate cuts to be introduced as a means of driving down mortgage rates.

The post UK Inflation Rises to 4%, Dashing Hopes of an Interest Rate Cut appeared first on theprimarymarket.com.

While the recent drop in housing prices is but a small dent in the 20% increase since the height of the COVID-19 pandemic, rising wage growth in the UK is helping to make property more affordable. “Households should be in a better place to capitalize on the improvement in affordability, given the fact we expect real incomes to tick up over the next year or so,” Gabriella Dickens, senior UK economist at Pantheon Macroeconomics observed.

Oxford Economics projected a 4% drop in UK house prices over the course of 2024, with most strategists expecting a drop between zero to 2%. Wages are forecasted to rise by 7.1% between the fourth quarter of 2022 and 2023 and 4% over the 12 months leading to the fourth quarter of 2024, according to Bloomberg Economics.

The post UK Property on Course for Record Affordability appeared first on theprimarymarket.com.

Fitch chose not to follow in the footsteps of Moody’s Investors Service, which raised its UK outlook a month ago from negative to stable after claiming that “policy predictability” had been restored. This places increasing pressure on Sunak, who has been under scrutiny by his Conservative Party as he struggles to shift public opinion in his favor ahead of a likely election next year.

Fitch projects UK economic growth to be 0.5% in 2023, with a mild recession pulling growth down to 0.3% in 2024 before leaping to a 1.8% growth rate in 2025. The government’s fiscal deficit is expected to amount to 5.4% of GDP for 2023. The UK’s outlook was cut last October when Sunak’s, predecessor, Liz Truss, announced a £45 billion package of tax cuts.

The post UK Debt Outlook Remains Negative, Credit Agency Fitch Confirms appeared first on theprimarymarket.com.

“Today’s announcement is a turning point for the future of AI infrastructure and development in the UK,” Prime Minister Rishi Sunak declared on Thursday. This funding will more than double Microsoft’s data center footprint in Britain.

According to the UK government, this investment will be used by Microsoft to bring over 20,000 of its state-of-the-art Graphics Processing Units to Britain, thereby providing a launchpad for machine learning and developing AI. Plans also include training local British workers so that they are equipped with the skills they need to build and work with AI.

The post Microsoft to Invest $3.2 Billion in UK in AI Push appeared first on theprimarymarket.com.

While inflation has continued to fall, BoE Governor Andrew Bailey explained that a further drop needs to be achieved in order to bring inflation down to the central bank’s 2% target. “We’ve held rates unchanged this month, but we’ll be watching closely to see if further rate increases are needed. It’s much too early to be thinking about rate cuts,” Bailey revealed.

Since reaching double-digit figures, UK inflation has gradually eased to 6.7% in the year September, unchanged from the previous month. Still, this rate is higher than the rest of the G7 economies, pushing the UK to ramp up its fight against stubborn inflation.

The post Bank of England Holds Rates at 15-Year High appeared first on theprimarymarket.com.

While the BoE’s Monetary Policy Committee is yet to lower its gross domestic product estimate for late 2023 and early 2024, official data has indicated a rise in the probability of an impending recession.

“GDP growth has been weaker, the unemployment rate is higher and pay growth is finally easing across all gauges,” Bloomberg Economics observed. “Financial markets have responded to the recent flow of news by pricing in a smaller-than-50% chance that interest rates reach 5.5%, having seen a peak expectation of over 6% in the summer.”

The post Bank of England Expected to Forecast Recession Risk Ahead of General Election appeared first on theprimarymarket.com.

Goldman Sachs, Deutsche Bank, and Nomura all believe that the Bank of England will hold rates steady, backtracking from previous expectations of a September hike. Chris Turner, head of markets at ING, disagreed, claiming that a hike of 25 basis points is still likely, claiming that “a hike would provide GBP/USD with some much-needed support.” 

The sterling fell by 0.28% against the US dollar to $1.2309. Meanwhile, the euro strengthened against the British pound by 0.23%, reaching 86.55 pence.

The post Sterling Staggers Ahead of Bank of England Policy Decision appeared first on theprimarymarket.com.

Excluding bonuses, British wages grew by 7.8% in the three months to July when compared to the previous year, figures from the Office for National Statistics on Tuesday showed. This matches the record pace reached in June and falls in line with analysts’ expectations. When including bonuses, wages grew 8.5%, exceeding the 8.4% growth the previous month.

Wage growth continued despite an uptick in unemployment, from 4.2% in June to 4.3% in July. Ashley Webb, UK economist at consultancy Capital Economics explained that while the labor market eased in July, wage growth “will only add to the Bank of England’s unease and supports our view that the Bank will raise interest rates once more, from 5.25% currently to a peak of 5.50%, next week.”

The post Sterling Remains Steady Following Strong UK Wage Data appeared first on theprimarymarket.com.

Such developments have strengthened bets that the Bank of England is set to implement a 25 basis point interest rate hike later this month. The central bank has implemented 14 straight rate hikes, bringing its key rate to 5.25%.

The pound declined by 0.5% against the US dollar to $1.2565; a slight rise from the $1.2529 realized earlier in the day. The latter figure is the pound’s weakest showing since June 13. The dollar index, which measures the greenback against six other currencies including the pound, rose 0.4% to 104.61.

The post Pound Slumps to 12-Week Low Amid Falling Business Activity appeared first on theprimarymarket.com.

Joblessness across Britain is on the rise while the housing market continues to dwindle. Still, the BoE remains determined to keep raising rates in an effort to suppress inflation. In addition to edging close to its highest level in 30 years, core inflation is more than three times higher than the central bank’s 2% target.

British inflation has managed to fall significantly over the last year, declining from 11% in October to just under 7% in July. The country is also beating back expectations that it will experience a recession in 2023, also reducing bets that a recession may start at the end of the year. Still, the UK remains the only Group of Seven (G7) economy that hasn’t bounced back to its pre-pandemic size.

The post UK Economy Slows Amid Bank of England Rate Hike appeared first on theprimarymarket.com.

Stubborn inflation has dashed investor hopes that the Bank of England would soon contemplate the introduction of interest rate cuts. “Improving interest rate expectations in recent weeks has led to some forecasters predicting the first cut in the first half of 2024, with lenders slashing mortgage rates as they battle it out to retain their existing clients and attract new business,” Alice Haine, personal finance analyst at Bestinvest explained.

Haine added that this unexpected rapid rise in inflation has come as a blow to mortgage holders and prospective buyers, who had hoped for interest rate cuts to be introduced as a means of driving down mortgage rates.

The post UK Inflation Rises to 4%, Dashing Hopes of an Interest Rate Cut appeared first on theprimarymarket.com.

While the recent drop in housing prices is but a small dent in the 20% increase since the height of the COVID-19 pandemic, rising wage growth in the UK is helping to make property more affordable. “Households should be in a better place to capitalize on the improvement in affordability, given the fact we expect real incomes to tick up over the next year or so,” Gabriella Dickens, senior UK economist at Pantheon Macroeconomics observed.

Oxford Economics projected a 4% drop in UK house prices over the course of 2024, with most strategists expecting a drop between zero to 2%. Wages are forecasted to rise by 7.1% between the fourth quarter of 2022 and 2023 and 4% over the 12 months leading to the fourth quarter of 2024, according to Bloomberg Economics.

The post UK Property on Course for Record Affordability appeared first on theprimarymarket.com.

Fitch chose not to follow in the footsteps of Moody’s Investors Service, which raised its UK outlook a month ago from negative to stable after claiming that “policy predictability” had been restored. This places increasing pressure on Sunak, who has been under scrutiny by his Conservative Party as he struggles to shift public opinion in his favor ahead of a likely election next year.

Fitch projects UK economic growth to be 0.5% in 2023, with a mild recession pulling growth down to 0.3% in 2024 before leaping to a 1.8% growth rate in 2025. The government’s fiscal deficit is expected to amount to 5.4% of GDP for 2023. The UK’s outlook was cut last October when Sunak’s, predecessor, Liz Truss, announced a £45 billion package of tax cuts.

The post UK Debt Outlook Remains Negative, Credit Agency Fitch Confirms appeared first on theprimarymarket.com.

“Today’s announcement is a turning point for the future of AI infrastructure and development in the UK,” Prime Minister Rishi Sunak declared on Thursday. This funding will more than double Microsoft’s data center footprint in Britain.

According to the UK government, this investment will be used by Microsoft to bring over 20,000 of its state-of-the-art Graphics Processing Units to Britain, thereby providing a launchpad for machine learning and developing AI. Plans also include training local British workers so that they are equipped with the skills they need to build and work with AI.

The post Microsoft to Invest $3.2 Billion in UK in AI Push appeared first on theprimarymarket.com.

While inflation has continued to fall, BoE Governor Andrew Bailey explained that a further drop needs to be achieved in order to bring inflation down to the central bank’s 2% target. “We’ve held rates unchanged this month, but we’ll be watching closely to see if further rate increases are needed. It’s much too early to be thinking about rate cuts,” Bailey revealed.

Since reaching double-digit figures, UK inflation has gradually eased to 6.7% in the year September, unchanged from the previous month. Still, this rate is higher than the rest of the G7 economies, pushing the UK to ramp up its fight against stubborn inflation.

The post Bank of England Holds Rates at 15-Year High appeared first on theprimarymarket.com.

While the BoE’s Monetary Policy Committee is yet to lower its gross domestic product estimate for late 2023 and early 2024, official data has indicated a rise in the probability of an impending recession.

“GDP growth has been weaker, the unemployment rate is higher and pay growth is finally easing across all gauges,” Bloomberg Economics observed. “Financial markets have responded to the recent flow of news by pricing in a smaller-than-50% chance that interest rates reach 5.5%, having seen a peak expectation of over 6% in the summer.”

The post Bank of England Expected to Forecast Recession Risk Ahead of General Election appeared first on theprimarymarket.com.

Goldman Sachs, Deutsche Bank, and Nomura all believe that the Bank of England will hold rates steady, backtracking from previous expectations of a September hike. Chris Turner, head of markets at ING, disagreed, claiming that a hike of 25 basis points is still likely, claiming that “a hike would provide GBP/USD with some much-needed support.” 

The sterling fell by 0.28% against the US dollar to $1.2309. Meanwhile, the euro strengthened against the British pound by 0.23%, reaching 86.55 pence.

The post Sterling Staggers Ahead of Bank of England Policy Decision appeared first on theprimarymarket.com.

Excluding bonuses, British wages grew by 7.8% in the three months to July when compared to the previous year, figures from the Office for National Statistics on Tuesday showed. This matches the record pace reached in June and falls in line with analysts’ expectations. When including bonuses, wages grew 8.5%, exceeding the 8.4% growth the previous month.

Wage growth continued despite an uptick in unemployment, from 4.2% in June to 4.3% in July. Ashley Webb, UK economist at consultancy Capital Economics explained that while the labor market eased in July, wage growth “will only add to the Bank of England’s unease and supports our view that the Bank will raise interest rates once more, from 5.25% currently to a peak of 5.50%, next week.”

The post Sterling Remains Steady Following Strong UK Wage Data appeared first on theprimarymarket.com.

Such developments have strengthened bets that the Bank of England is set to implement a 25 basis point interest rate hike later this month. The central bank has implemented 14 straight rate hikes, bringing its key rate to 5.25%.

The pound declined by 0.5% against the US dollar to $1.2565; a slight rise from the $1.2529 realized earlier in the day. The latter figure is the pound’s weakest showing since June 13. The dollar index, which measures the greenback against six other currencies including the pound, rose 0.4% to 104.61.

The post Pound Slumps to 12-Week Low Amid Falling Business Activity appeared first on theprimarymarket.com.

Joblessness across Britain is on the rise while the housing market continues to dwindle. Still, the BoE remains determined to keep raising rates in an effort to suppress inflation. In addition to edging close to its highest level in 30 years, core inflation is more than three times higher than the central bank’s 2% target.

British inflation has managed to fall significantly over the last year, declining from 11% in October to just under 7% in July. The country is also beating back expectations that it will experience a recession in 2023, also reducing bets that a recession may start at the end of the year. Still, the UK remains the only Group of Seven (G7) economy that hasn’t bounced back to its pre-pandemic size.

The post UK Economy Slows Amid Bank of England Rate Hike appeared first on theprimarymarket.com.