Press comment: Carney piles pressure on Bailey by holding rates at last meeting
Following news the Bank of England held interest rates at 0.75% in Mark Carney’s last Monetary Policy Committee, please find below comment from CJ Cowan, assistant portfolio manager at Quilter Investors:
“Speculation of an impending downward adjustment in rates gathered steam in the first few weeks of the year following comments from two Monetary Policy Committee members that they would consider voting for a cut if economic data did not improve. Coupled with two members already voting for a cut since November, this made the committee voting maths look particularly tight, although this ended up not being the case.
“Interest rate markets rapidly moved to price a 70% chance of immediate action from the BoE, although this was dialled back to around 50% going into today’s meeting. Indeed the UK’s economic fortunes weakened during 2019 and hard economic data reported throughout January was poor. Notably, inflation was softer than expected and considerably below the BoE’s 2% target while monthly GDP in November also signalled contraction of the economy.
“Recent survey data showed some degree of a post-election rebound so a majority of economists thought the MPC would hold on and see if this sentiment boost would be sustained and feed through into the hard data.
“They were proven right in Mark Carney’s final MPC meeting as Governor, although this piles some pressure onto incoming Governor Andrew Bailey, who may be compelled to cut at one of his first few meetings.
“With an economy growing below potential and inflation well below target it is likely just a matter of time before the Bank reduces rates as the tentative bounce in sentiment may prove to be temporary given the uncertainty that still remains around the UK’s future relationship with the EU and its other trading partners.”
Notes to Editors:
About Quilter plc:
Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.
Quilter plc oversees £110.4 billion in customer investments (as at 31 December 2019).
It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.
The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.
Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.
Wealth Platforms includes Old Mutual Wealth UK platform and Old Mutual International, including AAM Advisory in Singapore.
The Old Mutual Wealth Heritage life assurance business was acquired by ReAssure Group Plc on 2 January 2020.
Since its IPO in June 2018, Quilter plc’s businesses have progressively rebranded to Quilter, as follows:
- Quilter Financial Planning (previously Intrinsic)
- Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
- Quilter Financial Advisers (previously Charles Derby Group)
- Quilter Financial Adviser School
- Quilter Cheviot
- Quilter Investors
- Old Mutual Wealth (becoming Quilter Wealth Solutions in 2020)
- Old Mutual International (becoming Quilter International in 2020)
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