By Sandor Peto BUDAPEST (Reuters) - Hungary's central bank will keep its base interest rate on hold for the rest of 2019, preferring to tackle rising inflation by letting interbank rates rise, a Reuters poll ahead of its next policy meeting on Tuesday found. The National Bank of Hungary (NBH) expects inflation to drop soon, partly due to sluggish growth in the euro zone, the country's main trading partner. But headline inflation reached 3.9%, near the top of the NBH's 2-4% target range, in April and the economy was the European Union's fastest growing in the first quarter at 5.3%. "Domestic demand is strong and will remain strong next year," said K&H Bank analyst David Nemeth. "Inflation pressure is present and will be present. Inflation is above 3 percent, so the central bank will need kind of an adjustment." All 19 analysts polled from May 20-22 said the bank would hold its base rate at 0.9%, the lowest in the region, on Tuesday. The median forecast was for the rate to remain at … [Read more...] about Hungarian central bank to hold base rate to end of 2019
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By Bloomberg Tues., Jan. 15, 2019 Central banks enter the new year under pressure from investors to rethink just how aggressive they can be hiking interest rates. A slowdown in the world economy, the trade war and skittish financial markets are forcing policy-makers including Federal Reserve Chairman Jerome Powell to express fresh caution about their scope for tightening monetary policy. The People’s Bank of China is also pledging support for its economy. That outlook marks a change from last year where a majority of central banks raised rates and the European Central Bank ceased buying assets. Of course, if economies weather the latest challenges, policy-makers may need to rethink anew. What Our Economists Say: “Heightened uncertainty about the trajectory for policy normalization and reduced divergence between the Fed and the rest are set to characterize the 2019 central bank outlook.” — Tom Orlik Here is Bloomberg Economics’ quarterly … [Read more...] about When it comes to rates, what are central banks going to do next?
By Avantika Chilkoti The Wall Street Journal Fri., Nov. 30, 2018 Investors are frantically trying to predict the economic fallout from the U.K.’s exit from the European Union. One person they don’t seem to be listening to: Bank of England Gov. Mark Carney. The Canadian former Goldman Sachs Group Inc. executive has been a prominent voice in a chorus of warnings about the economic and financial dislocation that could result from Brexit. The Bank of England in a report this week suggested a disorderly break with the EU could leave the economy a 10th smaller in five years, potentially triggering the deepest recession since the Great Depression. “The direction of the effects of a reduction in openness is clear: lower supply capacity, weaker demand, a lower exchange rate and higher inflation,” Mr. Carney said. The U.K. Parliament is set to vote on a draft separation agreement on Dec. 11. If it is rejected, a deal could be approved via follow-up … [Read more...] about Looking for Brexit guidance? Investors pass over Bank of England’s Carney
By Huw Jones LONDON (Reuters) - British banks could face potential credit rating downgrades if there is a disorderly Brexit as this would be likely to trigger a domestic political crisis and economic contraction, credit rating agency Standard & Poor's said on Thursday. S&P said that UK banks' earnings and balance sheets would provide a solid cushion against a disorderly Brexit. But the agency also said: "Their current ratings and/or outlooks may not prove to be consistent with a disruptive Brexit accompanied by a severe economic shock." Britain and the European Union are aiming to reach agreement on a divorce settlement in time for an EU summit next week. S&P said that while it expects an orderly departure in March followed by a transition period to the end of 2020, some financial institutions have reached a point of no return and are setting up new hubs in the EU to avoid disruption. Even with an orderly Brexit, there would be pressure on banks to shift euro-denominated … [Read more...] about British banks risk ratings downgrades in disorderly Brexit
MANILA -- The World Bank said Thursday it lowered its growth forecast for the Philippines in 2018, citing the drag from weak exports and storm damage to agriculture, but the expansion remains "strong." Gross domestic product is poised to grow by 6.5 percent this year, from the initial 6.7-percent forecast, the World Bank said in a statement. It kept the 2019 and 2020 forecasts at 6.7 percent and 6.6 percent, respectively. Rising government spending on infrastructure will help growth "speed up" in the second half of 2018, it said. Moody's: Philippine growth unlikely to fall below 6 percent Economic growth slows on drag from Boracay closure, policy steps The World Bank flagged "considerable risks" to its growth forecast for the Philippines, including trade tensions between the US and China and rising interest rates in the US, which could further weaken the peso. "To manage these risks, maintaining strong macroeconomic fundamentals is key. At the same time, accelerating structural … [Read more...] about World Bank trims PH growth forecast for 2018