Dave Ramsden, the new deputy governor of the Bank of England said that he was not in support of voting for an interest rate hike, calling into question when the BoE will implement its first interest rate hike in over ten years. Nevertheless, Ramsden admitted that his opinion was not part of the majority of BoE policymakers that do believe an interest rate hike is necessary in the coming months. Mark Carney, the BoE governor, has stated his opinion that an interest rate hike is forthcoming.
The BoE’s net policy meeting is on November 2, and some analysts believe that the interest rate hike could be implemented as early as next month. The sterling was lower against the U.S. dollar near midday on Tuesday after Ramsden’s comments, trading at $1.1765.
Britain’s inflation rate hit 3 percent in September, well above the BoE’s target of 2 percent, and both political economists and market analysts are concerned that the country’s upcoming secession from the European Union will prevent the economy from expanding as needed. Among the problems expected are low migration which will reduce the availability of low-cost labor and weaker investments into the country as investors wait to see how Brexit will impact the country.
Gold Prices Sink Below Key Levels
Gold prices were under pressure on Tuesday, falling below the important $1,3000 level as speculation continued that John Taylor, a noted policy hawk, may be a top contender for the position of Federal Reserve chair when Janet Yellen’s term expires. President Trump will be meeting with Yellen later this week to discuss the position.