Mark Carney era begins with first UK rate decision

WITH US markets closed on Thursday, the spotlight will shine even brighter on new Bank of England governor Mark Carney as he hosts his first Monetary Policy Committee rate setting meeting.

But despite all the fanfare over his arrival, the Canadian is expected to preside over another round of the status quo. The bank rate has been at its 0.5 per cent low since March 2009.

“With the economy currently showing signs of widespread improvement, pressure on Carney to take immediate action has receded thereby giving him more time to take full stock of the situation from within the Bank of England and to establish his working relationship with the rest of the MPC,” said Howard Archer of IHS Global Insight.

“We believe it is unlikely that any major policy action will occur at the July MPC meeting, especially as the committee will be getting the Bank of England’s new growth and inflation forecasts at the August meeting,” he said, adding that further quantitative easing is likely as soon as August.

The European Central Bank, which also holds its monetary meeting on Thursday, is also not expected to change rates, but president Mario Draghi may discuss just how much longer the ECB will stick with extraordinary policy settings.

A busy economics week starts today with a slew of reports, including money supply for May, net lending for homes and individuals for May and mortgage approval figures.

June manufacturing figures for the UK and across the globe will reveal whether recent signs of improvement are merely a false start.

Other notable figures due for release this week include the BRC shop price index tomorrow, Halifax house price data and services PMI on Wednesday, the Lloyds employment confidence report on Thursday and new car registrations on Friday.

In a light corporate calendar, the week begins with reports today from Omega Diagnostics Group and Ashmore Group, followed by news tomorrow from Anite, Sweett Group, ST Modwen Properties, Ocado Group, Persimmon, N Brown Group and Topps Tiles.

On Wednesday Begbies Traynor and Tullow Oil will update the market and Thursday will bring news from Dunelm, NCC Group, Low & Bonar, Taylor Wimpey and Namakwa Diamonds.