England Bank is preparing to announce the reduction in UK interest rates on Thursday. As Donald Trump has strengthened its attack on the US Federal Reserve, central banks around the world are facing an increase in scrutiny.
Trump has maintained the highest growth rate in the rich country of G7 for several years and has all the prospects for the G7 public opinion polls in 2025, but to increase the economy. I want a low borrowing cost.
Three days after the inauguration ceremony, the president stated:
Jerome Powell, the chairman of the Federal Reserve, resisted the attack by President Trump last week because the US fare was stable.
Trump’s comments seemed to have encouraged Christine Lagard, the European Central Bank boss, to warn the political interference with monetary policy, to re -compete, and to warn the risk inflation that causes panic in financial markets.
Against this background, Andrew Bailey, the governor of the bank, presented a decision on British rates this week, and will be widely reduced from 4.75 % to 4.5 %. After two reductions last year, the financial market is hoping to reduce it three times in 2025, and we hope that the basic fee will be 4 % by the end of the year.
Bailey is not a stranger to political pressure. Former Prime Minister Liz Truss threatened to consider the authority of the central bank in response to continuous interest rates when inflation was over 10 %.
Later, Truss fired Bailey, but his eight -year contract and “deep state” made it impossible.
This time, the governor has nothing to do with Washington’s latest drama, but feels heat from a different direction.
Bailey and the MPCs (MPC) colleagues are considering whether economic growth will continue and they are responsible.
At this time, Rachel Reeves, the Prime Minister, has adopted all interference while fighting to fight to do business in the first few months after the difficulties of taking office. However, if the UK interest rate is 4.75 % of the highest British interest rate in the G7 consisting of France, Germany, Italy, Japan, the United States, the United Kingdom, and Canada, you can switch attention to the central bank. 。
I want to criticize Bailey, but there is a Labor Party member who is afraid of REC RE RE from Rachel Reeves, and does not like to publish.
Most forecasts indicate that this year’s economy is amazing -as in 2024.
The United Kingdom should continue to exceed most of the Continental Europe in 2025, but as the victory progresses, it is almost worthwhile. For most British people, it is ranked as another year of stagnation.
Bank officials are worried that the high wages of the private sector will re -push inflation. Recently, the weakness of pounds on the dollar caused a headache.
Stirling decreased after the financial market, taking into account the amount of the new president’s policies and hindering further reduction of the Fed, the financial market has decreased. The reaction was one of the panic after Trump returned to the White House and was thrown as inflation, and the previous prediction of the US rate reduction was reversed.
The dollar has been enhanced, and the pound has fallen to higher interest rates than expected in the United States. Lower pounds make imports more expensive and push up inflation.
Some forecasts oppose consensus. The International Currency Fund stated that in recent health checks in the British economy, wage growth could slow down rapidly, other inflation pressure was weakened this year, and the MPC could push four speed reductions to 3.75 %. 。
Most economists agree that interest rates punishes the economy and is too high. As some MPC members want to do, killing inflation remains is too high. The inflation rate in the UK was 2.5 % in December, which was eased from 2.6 % in November, but exceeded the 2 % of banks.
Although he wants to criticize Bailey, there is a Labor Party member of Labor Party who dislikes RE’s responsibility from Reeves, who promised Bailey’s independence.
As a result, Bailey and MPC reflect the damage they do when they follow the hardline of Powell, not the labor government.
The Fed has a powerful economy to manage and control. Banks, on the other hand, supervise the economic economy in the British economy that requires stimulation.
