Three Strikes Should Rule Out U.K. Rate Increase
The latest economic data is weakening the case for a rise next month.
Carney has reason to pause.
Photographer: Darryl Dyck/BloombergThe interest-rate futures market is convinced the Bank of England will raise borrowing costs next month. But three consecutive sets of disappointing economic statistics this week should restrain the hawks on the Monetary Policy Committee from turning the present political and economic drama into a crisis.
The pound lurched lower on Thursday, dropping below $1.30, after disappointing retail sales figures. The combination of a heat wave and the start of the World Cup soccer tournament failed to generate the expected surge in demand: The median forecast of economists surveyed by Bloomberg News was for a gain of 0.2 percent. Instead, they got a drop of 0.5 percent.