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"Further progress is likely to become more difficult as base effects fade, and supply-constraints could drive global energy and food prices higher again." Brent crude prices have risen 27% since mid-year and U.S. crude is up 30%, with U.S. retail pump prices already up almost 10% so far since June. Oil and inflation expectationsReuters GraphicsSLOWING DESCENTAnd alongside creeping worries about rising debt supply, the long end of bond markets has been rattled again by the oil price jump. And this has been a far bigger influence on the inflation trajectory than oil prices per se. Yet, restive crude prices will still cloud a messy and tricky battle with inflation expectations just as policy tightening cycles near an end.

Persons: Brent that's, Christian Keller, Akash Utsav, Andrew Goodwin, there's, George H.W, Jamie Freed Organizations: Brent, UBS, Organization for Economic Cooperation, Development, Barclays, Federal Reserve, European Central Bank, Bank of England, U.S, Treasury, Oxford, Monetary Fund, Reuters Graphics Reuters, Reuters, Thomson Locations: Ukraine, Saudi Arabia, Russia, tailwind, U.S, Europe, Britain, West, George H.W . Bush

☆ Bank of England set to raise rates to 5.25% as high inflation persists
▼ + stars: | 2023-07-28 | by ( David Milliken | ) www.reuters.com time to read: +5 min

Expectations for peak BoE rates reached 6.5% on July 11 after data showed record wage growth. But they fell back after a bigger-than-expected decline in consumer price inflation. Still, that inflation rate is nearly four times the BoE's 2% target and double the rate in the United States. Following the end of Silvana Tenreyro's tenure on the BoE's Monetary Policy Committee, fellow external member Swati Dhingra is likely to be alone in making the case that producer price inflation - rather than wage growth - is a better guide to future consumer price inflation trends. Annual producer price inflation fell to 0.1% in June, its lowest since December 2020, down from a high of nearly 20% last July, which it hit just a few months before CPI peaked at 11.1%.

Persons: BoE, Andrew Goodwin, BoE Governor Andrew Bailey, Dave Ramsden, Ramsden, Peter Schaffrik, Cathal Kennedy, Silvana Tenreyro's, Swati Dhingra, Megan Greene, Bailey, Huw Pill, David Milliken, Kirsten Donovan Organizations: Bank of England, U.S . Federal Reserve, European Central Bank, Oxford Economics, Reuters, MPC, HSBC, RBC, Committee, Kroll Institute, Tenreyro, Monetary, Thomson Locations: Britain, United States, Germany

☆ U.K. Inflation Rate Slows to 7.9 Percent, as Price Pressures Ease
▼ + stars: | 2023-07-19 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +4 min

Headline inflation rates have declined, but policymakers are closely watching other measures of price pressure that signal how deeply inflation has become embedded in the British economy. In June, some of these price pressures eased: Inflation in the services sector slowed slightly to 7.2 percent, and core inflation declined for the first time since January. In January, the government pledged to halve the inflation rate by the end of this year, which would mean a fall to 5.2 percent. This partially explains Britain’s relatively high inflation rate — which is higher than in Western Europe and double the rate in the United States — but there are other reasons that inflationary pressures in Britain are strong. The Bank of England raised its interest rate a 13th time last month, to 5 percent, from 0.1 percent in late 2021.

Persons: Price, ” Andrew Goodwin, Mr, Goodwin, ” Andrew Bailey, Bailey Organizations: Oxford Economics, Bank of England, Employers Locations: British, Europe, Britain, Western Europe, United States

☆ UK mortgage rates rise again, turning screw on homeowners and buyers
▼ + stars: | 2023-06-29 | by ( Andy Bruce | ) www.reuters.com time to read: +2 min

LONDON, June 29 (Reuters) - Major British lenders on Thursday announced another increase in mortgage rates offered via brokers, pushing many products above the 6% mark in painful news for many homeowners and potential buyers. Barclays (BARC.L), NatWest (NWG.L) and Virgin Money (VMUK.L) informed brokers that rates on many mortgage offerings will rise again on Friday, according to emails seen by Reuters. "As mortgage rates continue to rise, the property market is being pushed further towards a cliff edge and there's no real help in sight," mortgage broker Lewis Shaw of Shaw Financial Services said. Two-year swap rates - a key determinant of mortgage borrowing costs - have soared by 0.83 percentage points over the course of June. Mortgage rates of 6% represent the same financial burden from repayments as they did in the late 1980s, even though mortgage rates were around 13% then, according to housing market analyst Neal Hudson, founder of consultancy BuiltPlace.

Persons: Lewis Shaw, Andrew Goodwin, Liz Truss, Neal Hudson, Andy Bruce, William Schomberg, Sachin Ravikumar Organizations: Bank of England, Barclays, NatWest, Virgin, Reuters, Nationwide Building Society, Shaw Financial Services, Oxford, Oxford Economics, Thomson

☆ UK housing market strains grow as mortgage rates creep higher
▼ + stars: | 2023-06-09 | by ( Andy Bruce | ) www.reuters.com time to read: +2 min

REUTERS/Luke MacGregor/File PhotoLONDON, June 9 (Reuters) - Mortgage rates in Britain rose again on Friday as economists warned that rising borrowing costs would put the housing market under renewed strain. Late on Thursday, HSBC temporarily withdrew mortgage products for customers applying via brokers. HSBC said its mortgage products and interest rates remained available for existing customers. Rival lender Nationwide Building Society also raised its mortgage rates on Friday, having already revised them up twice since last month's Bank of England interest rate hike. On Friday, consultancy Oxford Economics predicted a 10% peak-to-trough drop in house prices, based on the BoE raising interest rates to 5%.

Persons: Luke MacGregor, Moneyfacts, BoE, Andrew Goodwin, we're, David Milliken, Frances Kerry, Sharon Singleton Organizations: Bank of England, HSBC, Society, Bank of, Oxford Economics, Thomson Locations: London, Britain, Bank of England, British

☆ Bank of England set to raise rates to 4.5% next week, a possible peak
▼ + stars: | 2023-05-05 | by ( David Milliken | ) www.reuters.com time to read: +5 min

Economists polled by Reuters this week were unanimous that the BoE's Monetary Policy Committee (MPC) will raise rates to 4.5% next week, in sharp contrast to a poll two weeks earlier which showed only a slim majority expecting a hike. "Previously we had seen the MPC holding Bank Rate at 4.25% but the April labour market and March CPI inflation data were too much to ignore," said Peter Schaffrik, global macro strategist at Royal Bank of Canada. Only a minority of economists polled by Reuters this week expect the BoE to raise interest rates above 4.5% this year. But investors in interest rate futures - whose views shift more rapidly - see rates reaching 4.75% or 5% by September. "In our view, further tightening beyond May can't be ruled out," said Andrew Goodwin, chief UK economist at Oxford Economics.

The immediate outlook is less sombre: The economy is due to shrink by 0.2% in 2023, not 1.4% as previously thought. It also said Hunt's three-year business investment incentives would bring investment forward at a cost to later years. "We're on track to meet the - relatively loose, poorly designed - fiscal rule on paper only," he said. "It's even more important that the government builds on the measures presented today and produces a more comprehensive plan for boosting growth." ($1 = 0.8282 pounds)($1 = 0.8283 pounds)Writing by William Schomberg, Editing by Angus MacSwanOur Standards: The Thomson Reuters Trust Principles.

☆ Bank of England poised to raise rates by most in 33 years
▼ + stars: | 2022-10-28 | by ( William Schomberg | ) www.reuters.com time to read: +4 min

On Aug. 4, the BoE raised rates by half a percentage point, its biggest increase in 27 years, and did so again in September. But the ongoing spread of inflation through Britain's economy this year means the BoE remains on high alert. FISCAL UNCERTAINTYInvestors are putting a roughly 90% chance on a 75 basis-point hike in Bank Rate to 3% on Nov. 3. The BoE's plan to start selling some of the bonds it bought since 2009 to support the economy will also ease some of the pressure to raise rates. Deutsche Bank said the planned 40 billion pounds' worth of sales over the next year were equivalent to about 25 basis points of rate hikes.

☆ Bank of England to hike by 75 bps on Nov. 3 but may go bigger
▼ + stars: | 2022-10-25 | by ( Jonathan Cable | ) www.reuters.com time to read: +4 min

Annual price rises were expected to peak at 10.4% this quarter, the poll showed, before gradually declining, but won't fall to target until at least 2025. The median forecast in the Oct. 18-25 poll showed the BoE would take Bank Rate up by 75 bps to 3.00% next week. But while that was a view held by 18 of 30 respondents, 10 expected 100 bps, one said 125 bps and one said 150. It was then expected to add another 75 bps in December and 50 bps next quarter before pausing, meaning rates would peak at 4.25% in the current cycle. Both the European Central Bank and the U.S. Federal Reserve are expected to deliver 75-bps increases at their next meetings.

☆ Mortgage mayhem sparks fears of a housing market crash in Britain
▼ + stars: | 2022-10-04 | by ( Elliot Smith | ) www.cnbc.com time to read: +3 min

U.K. mortgage rates have skyrocketed since Finance Minister Kwasi Kwarteng's mini-budget on Sept. 23, prompting banks to pull mortgage products threatening a deepen an expected housing market downturn. Dan Kitwood | Getty ImagesLONDON — There are growing fears of a housing market crash in the U.K., after a swathe of tax cuts announced by the government sent interest rate expectations soaring, driving up lending rates for homebuyers. Economist Andrew Goodwin suggested that there could be more pain ahead — particularly when it comes to the housing market. A number of banks suspended mortgage deals for new customers, and many have now returned to the market with significantly higher rates. Interest rate expectationsLooking ahead, whether the fixed rates on mortgages remain elevated or begin to moderate will depend on the trajectory of interest rates expectations.

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