Sterling headed for 4th successive weekly decline after BoE holds rates

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Since he joined the BoE in 2013, Carney has signaled several times that the time was nearing for rates to rise from the historic low of 0.5 percent they reached during the 2008-09 financial crisis, only for economic data to go the wrong way.

The BOE expects an economic expansion of 1.4 percent this year, down from 1.8 percent in February's forecasts.

Sterling fell on the news and was trading lower by 0.2% against the United States dollar at 1.352.

The BOE isn't the only central bank to wobble on the exit ramp from the easy money of the past decade, even as the U.S. Federal Reserve sticks to its plan to gradually raise rates.

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The pound fell sharply after the BoE on Thursday held interest rates steady as expected but cut its growth and inflation projections for this year and next. It is, effectively, the fundamental interest rate on which most commercial interest rates on standard bank accounts and loans are ultimately based (though of course other things like risk will play a part when calculating interest on loans). But growth was weakest in Britain, where - less than a year before it is due to leave the European Union - Brexit-related pressures have squeezed consumer spending power and hurt firms' willingness to sign off on major investments.

In minutes of the MPC meeting, the Bank said: "Weakness in the data for the first quarter had been consistent with a temporary soft patch, with few implications for the current degree of slack or for the outlook for the United Kingdom economy".

Minutes of the meeting showed that most MPC members now wanted to wait to see "how the data unfolded" over the coming months. BoE governor Mark Carney said: "The overall economic climate in the United Kingdom looks little changed thus far".

"Our UK economists noted that the meeting brought out mixed messages from the BoE".

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Policymakers Ian McCafferty and Michael Saunders, who again voted for a rate rise, agreed the weak growth so far this year reflected "temporary or erratic factors", but said delaying a rate hike risked more abrupt tightening later on.

While headline inflation was shown to have risen in line with expectations last month, core inflation remained subdued.

With the United Kingdom inflation decelerating toward the target more quickly than expected in February and the GDP growth slowing down sharply at the beginning of this year, it was no surprise from the Bank of England to keep the Bank rate at the unchanged level of 0.50 percent in May. While the subdued first quarter outturn signified that the full-year growth estimates was lowered, unchanged forecasts for 2019 and 2010 meant that the central bank's broader views on the economy were left intact, stated Lloyds Bank.

"As Brexit looms on the horizon the United Kingdom economy is growing slower than global peers, with no acceleration in sight".

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