RBI cuts repo rate in first policy review under new governor

09 February, 2019, 16:30 | Author: Eric Barnett
  • A pedestrian passes the Bank of England in the City of London

"Uncertainty about the outcome of negotiations has intensified since November and is now weighing more heavily on activity, predominantly through lower business investment and tighter financial conditions", he said.

The Reserve Bank of Australia, Bank of Korea and Bank of Thailand have also tempered their outlooks in recent weeks.

India's central bank on Thursday unexpectedly lowered interest rates and, as anticipated, shifted its stance to "neutral" to boost a slowing economy after a sharp slide in the inflation rate.

Bank of England Governor Mark Carney pointed towards uncertainties around Brexit causing "short-term volatility" and a "series of tensions" in the economy and businesses.

"Nothing has really changed in terms of the UK's economic prospects since the MPC's last decision to keep rates the same in December - the direction of the economy is still dogged by the potential of a no-deal Brexit".

The BoE has previously said a worst-case Brexit scenario, with no deal for a transition period and a sudden loss of confidence in Britain among foreign investors, could hammer the economy more than the global financial crisis did.

"Taking into consideration these developments and assuming a normal monsoon in 2019, the path of CPI inflation is revised downwards to 2.8 per cent in Q4:2018-19, 3.2-3.4 per cent in H1:2019-20 and 3.9 per cent in Q3:2019-20, with risks broadly balanced around the central trajectory", RBI said.

The greenback is extending gains against the likes of the pound, euro, swissie and loonie and that is resulting in a drop in cable below the 1.2900 handle.


Consumer confidence "took another step down in January", he cautioned, as household spending and the housing market have begun to show signs of being impacted.

It's unclear she will be able to get any concessions and fears have grown in recent weeks that Britain could crash out of the European Union without a deal, a worst-case scenario that the Bank of England has previously said could see the British economy shrink by 8 per cent within months and house prices collapse by around a third.

But it said the growth hit was expected to be short-lived, with a recovery in expansion later in 2019 - though this is based on a Brexit deal being reached by March 29.

The MPC also trimmed its economic growth forecast, to 7.2-7.4 percent during April-September from its previous 7.5 percent estimate.

It said the United Kingdom economy is set to grow by just 1.2 percent this year instead of 1.7 percent as predicted just three months ago.

Assuming a smooth Brexit, policy makers reiterated that limited and gradual rate increases will be necessary.

Investors now see nearly no chance of a quarter-point rate move by the end of the year.

It forecasts recent drops in oil prices to see inflation - now at 2.1 per cent - ease back below its 2 per cent target for much of 2019, but pick up again further out due to domestic pressures, such as wage growth.

Recommended:



Popular

How to invite friends to the Division 2 Beta
This beta phase is not under an NDA, so we encourage everyone to capture and share their experiences with the community. If you'd planned on pulling an all-nighter with the Division 2 beta , you'll have to pull the plug every now and then.

Winter Weather Travel Advisory in effect for Wednesday
Some dry weather is expected tomorrow midday-afternoon with mostly cloudy skies and highs around 25 degrees. Environment Canada has now ended a freezing drizzle advisory for Waterloo Region and Wellington County.

Facebook to appeal against German ruling on data collection
They're simply using their data sharing methods to protect you against terrorism and child abuse, according to Facebook . Facebook has been ordered to cease all of its data collection practices in Germany, after a recent German court ruling.

Amazon reconsidering NYC location, according to report | Digital
The source said New Jersey officials have not been given any indication that Amazon is considering moving out of NY . Though, protests have been a near constant over the four months since Amazon announced its move to Queens.

Jaguar Land Rover posts £270m loss amid 4500 job losses
Of the £3.4 billion, £3.1 billion (RM16.30 billion) accounted for the write-down on the value of its investments. The company's sales in Europe were up slightly, despite an eight per cent drop in the overall market.

New Zealand vs India - 2nd T20 International Preview & Prediction
There was no such mark when the ball passed the bat on "Snicko", but replays also seemed to confirm an inside edge. Ross Taylor was forced to run singles as the hit-me balls dried up and de Grandhomme was also slowed down.

22 dead in measles outbreak in the Philippines
As of 26 January there have been 1,813 measles cases and 26 deaths, according to the Department of Health Epidemiology Bureau. The measles cases at San Lazaro now total more than half of the 2,654 cases it had for the whole of previous year .

Chris Brown Tells Offset 'Fight Me' After Migos Rapper Calls Him Out
Now, it has Chris Brown (aka Bhris Brown) and Offset are all ready to fight.all over a meme. "All this cap on IG is what's lame". Chris Brown has hit out at Offset after the rapper criticised him for sharing a meme about 21 Savage .

Sarri wants Hazard to be ‘happy’ in next career move
Sometimes we keep possession, and I understand the fans want us to go forward [more directly], but it is part of the football. Higuain and Hazard played together for the first time in a terrible 4-0 loss to Bournemouth.

John Dingell, Longest-Serving Congressman, Publishes Posthumous Op-ed
Dingell had introduced a universal health care coverage bill in each of his terms. "I look forward to catching up with him soon". John Dingell , D-Mich. poses for a photograph inside his office in House Rayburn Office Building on Capitol Hill in Washington.