Bank of England Holds Interest Rates Steady at 5.5 Percent, Rejecting Calls for a Cut
The Bank of England held interest rates steady at 5.5 percent on Thursday, resisting calls for a cut amid mounting signs of a slowing domestic economy.
Economists had expected the decision would be a close call as the central bank weighed data showing poor retail sales and falling house prices against the threat of higher inflation from soaring oil prices and rising food costs.
The decision to keep rates on hold also gives the bank more time to assess the impact of last month's quarter of a percentage point cut -- the first in more than two years -- from a six-year high of 5.75 percent.
Bank of Korea Keeps Key Loan Rate on Hold Amid Worries Over Global Economy, Local Inflation
The Bank of Korea held its benchmark interest rate steady Thursday, saying it will closely monitor external risks and domestic inflation.
The central bank said in a statement that it kept its overnight call rate target for loans to commercial banks at 5 percent. The decision was unanimously forecast by a dozen economists surveyed by Dow Jones Newswires.
The last time the call rate was higher was in early February of 2001 when it stood at 5.25 percent. It was raised to 5 percent in August last year, having dipped as low as 3.25 percent in the intervening period.
The bank also said local economic growth is maintaining its momentum on strong exports and a solid recovery in capital investment, though inflation is likely to remain high in the months ahead. The consumer price index is expected to rise strongly due to both demand and higher prices for commodities such as oil, the BOK said.
In the coming months, the country's economy will continue to show firm growth on the back of sturdy exports coupled with a recovery in domestic demand. But the bank said it will continue to monitor rising uncertainties at home and abroad that could begin to weigh on growth.
The latter appeared to refer to worries of a possible economic slowdown resulting from the global credit crunch and record-high oil prices. South Korean "inflation is expected to ease in the second half of the year," Bank of Korea Gov. Lee Seong-tae told reporters, though he said it is also expected to hover near the upper limit of the bank's target range of 2.5 percent to 3.5 percent in the first half of the year.
The decision to keep its policy rate on hold came after the central bank reiterated Sunday that its main goal is to keep inflation under control. In December, consumer prices rose 3.6 percent on year, up a touch from November's 3.5 percent gain and the highest inflation since October 2004. The central bank forecast headline inflation of 3.3 percent this year, up from 2.5 percent last year.
The Bank of England held interest rates steady at 5.5 percent on Thursday, resisting calls for a cut amid mounting signs of a slowing domestic economy.
Economists had expected the decision would be a close call as the central bank weighed data showing poor retail sales and falling house prices against the threat of higher inflation from soaring oil prices and rising food costs.
The decision to keep rates on hold also gives the bank more time to assess the impact of last month's quarter of a percentage point cut -- the first in more than two years -- from a six-year high of 5.75 percent.
Bank of Korea Keeps Key Loan Rate on Hold Amid Worries Over Global Economy, Local Inflation
The Bank of Korea held its benchmark interest rate steady Thursday, saying it will closely monitor external risks and domestic inflation.
The central bank said in a statement that it kept its overnight call rate target for loans to commercial banks at 5 percent. The decision was unanimously forecast by a dozen economists surveyed by Dow Jones Newswires.
The last time the call rate was higher was in early February of 2001 when it stood at 5.25 percent. It was raised to 5 percent in August last year, having dipped as low as 3.25 percent in the intervening period.
The bank also said local economic growth is maintaining its momentum on strong exports and a solid recovery in capital investment, though inflation is likely to remain high in the months ahead. The consumer price index is expected to rise strongly due to both demand and higher prices for commodities such as oil, the BOK said.
In the coming months, the country's economy will continue to show firm growth on the back of sturdy exports coupled with a recovery in domestic demand. But the bank said it will continue to monitor rising uncertainties at home and abroad that could begin to weigh on growth.
The latter appeared to refer to worries of a possible economic slowdown resulting from the global credit crunch and record-high oil prices. South Korean "inflation is expected to ease in the second half of the year," Bank of Korea Gov. Lee Seong-tae told reporters, though he said it is also expected to hover near the upper limit of the bank's target range of 2.5 percent to 3.5 percent in the first half of the year.
The decision to keep its policy rate on hold came after the central bank reiterated Sunday that its main goal is to keep inflation under control. In December, consumer prices rose 3.6 percent on year, up a touch from November's 3.5 percent gain and the highest inflation since October 2004. The central bank forecast headline inflation of 3.3 percent this year, up from 2.5 percent last year.
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