The Bank of England (BoE) made the decision to keep the benchmark rate at .5 percent, as expected. BoE Governor Mark Carney remains firms in that rates will not move higher until employment falls below seven percent.
As said before, Carney mentioned that even unemployment below the target is not a guarantee for higher interest rates. The central bank’s Monetary Policy Committee (MPC) issued the .5 percent benchmark in 2009.
Currently, the unemployment in the United Kingdom is still 7.6 percent and inflation in continuing to fall. The consumer price index fell to 2.2 percent in October from just under three percent.
Office for Budget Responsibility (OBR) had increased its UK growth forecast for 2013 from 0.6% to 1.4%. Although the United Kingdom is growing, like other rebounded economies, growth still remains fragile and could be sometime until growth is assured.
The European Central Bank (ECB) also kept rates level and decided to keep deposit rates at zero, instead of the negative rate rumors that floated around in November.
However, there is sepculation – really been around for awhile – that the ECB is not doing enough to support the eurozone recovery.”If things get worse, the Council is ready, willing and able to act,” said Richard Barwell, an economist at the Royal Bank of Scotland Group PLC. The only question is how much worse? Unemployment has been over 12 percent for way too long, and the union’s youth is sharing the woes of many generations in Japan.
Mario Draghi, the ECB president, will release inflation and growth data at today’s press conference.