Money Minute Thursday 30 January: will the Bank of England cut interest rates?

Today's Money Minute looks ahead to the Bank of England's decision on interest rates - where the policy committee remains split on whether to cut or not.

The big economic event of today for British viewers is the Bank of England’s interest rate decision at mid-day. Markets are pretty evenly split as to whether or not the Bank will cut Britain's key interest rate from 0.75% to 0.5%. 

On the one hand, outgoing governor Mark Carney – whose last meeting this is – has hinted at there being a case for cutting rates, as economic data in the UK weakened at the end of last year. However, there have been signs of a post-election bounce, notably the most recent surveys of business activity for January.  So it’s an unusually uncertain rate decision. 

If the Bank does cut, the pound is likely to dip, but by how much will depend on just how pessimistic the tone is. Share prices, however, would probably rise on the prospect of cheaper money.  

If the Bank stays on hold, that’s likely to mean a stronger or at least static pound. But it would be less positive for shares.

Recommended

Why we should scrap the Budget
Budget

Why we should scrap the Budget

The yearly Budget, big set-piece of British politics, encourages the very worst from the government, says Matthew Lynn.
24 Oct 2021
The charts that matter: bond yields turn back up and a new bitcoin record
Global Economy

The charts that matter: bond yields turn back up and a new bitcoin record

Bitcoin hit a new all-time high, while government bond yields turned back up. Here’s how that has affected the charts that matter most to the global e…
23 Oct 2021
Larry Fink: the undisputed king of Wall Street
People

Larry Fink: the undisputed king of Wall Street

Larry Fink survived two big financial crises and went on to build a massive asset manager, doing for investing what Henry Ford did for cars. He has hi…
23 Oct 2021
Cryptocurrency roundup: bitcoin hits a new record high
Bitcoin & crypto

Cryptocurrency roundup: bitcoin hits a new record high

In the week when bitcoin hit a new high, we look at what’s been going on in the world of cryptocurrencies this week.
22 Oct 2021

Most Popular

How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
Properties for sale for around £1m
Houses for sale

Properties for sale for around £1m

From a stone-built farmhouse in the Snowdonia National Park, to a Victorian terraced house close to London’s Regent’s Canal, eight of the best propert…
15 Oct 2021
How to invest in SMRs – the future of green energy
Energy

How to invest in SMRs – the future of green energy

The UK’s electricity supply needs to be more robust for days when the wind doesn’t blow. We need nuclear power, says Dominic Frisby. And the future of…
6 Oct 2021