Bank of England

A top Bank of England official pushed back on Monday at suggestions from a leading candidate to become Britain's next prime minister that the government should set a "clear direction of travel" for monetary policy.

Britain's biggest domestic lender Lloyds Banking Group contacted 2 million of its 26 million customers in May after identifying they could need extra support to cope with soaring food and energy prices and rising debt costs.

Bank of England Governor Andrew Bailey said on Monday that he still thought that inflation was likely to fall sharply next year, broadly in line with forecasts the British central bank presented in early May.

Bank of England chief economist Huw Pill warned on Wednesday that Britain's economy would slow to a crawl over the next 12 months and repeated his preference for a "steady-handed" approach to raising interest rates.

Britain racked up a record shortfall in its current account in early 2022, in part due to the soaring cost of its fuel imports, according to data that officials cautioned could be revised.

As interest rates rise, consumers and businesses will find it more costly to borrow to invest and spend, and aggregate demand will fall further.

British finance minister Rishi Sunak has toughened his language towards Bank of England Governor Andrew Bailey, a reflection of the political pressure piling on them both as inflation surges towards double digits.

World stocks plummeted again on Thursday and government bonds hovered near multi-year highs after a series of rate rises from global central banks rekindled fears that aggressive policy tightening could drag economies into recession.

The pound slumped one percent against the dollar following the announcement, one day after the Federal Reserve hiked US interest rates far more aggressively to fight runaway consumer prices in the world's biggest economy.

The Bank of England looks set to override its worries about a sharp slowdown in the British economy and raise interest rates again on Thursday as it tries to tackle an inflation rate on course for double digits.

Britain's economy unexpectedly shrank in April, official figures showed on Monday, adding to fears of a sharp slowdown just three days before the Bank of England announces the scale of its latest interest rate response to the surge in inflation.

The Bank of England said on Friday it was satisfied lenders had taken steps to ensure they were no longer "too big to fail" in any future crisis, though it found shortcomings at three major banks.

NIESR cut its UK growth forecast for 2022 to 3.5% from 4.8%, and downgraded its 2023 forecast to 0.8% from 1.3%

The bank said the error was caused by a scheduling issue which "we quickly identified and rectified".

BoE governor Andrew Bailey believes that recovery is flattening as a result of the pandemic and global supply chain bottlenecks.

The Consumer Prices Index hit an above-target 2.5 percent in June as Britain lifted virus curbs.

While opinion polls suggest overall public backing for the stay-at-home policy, concerns are mounting about the impact on the economy and on mental health.

The pound rallied on the update, which included news that the BoE held its main interest rate at a record-low 0.1 percent.

Finance minister Rishi Sunak is due to deliver his spending plans at 1130 GMT, having already flagged £3 billion of green investment.

In Europe, investors were underwhelmed by the Bank of England's latest monetary policy decisions, which undermined the pound and London stocks.

The British central bank has been at the forefront of economic fire-fighting over this year's deadly COVID-19 emergency.

Britain's economy shrank in the first quarter at the fastest pace since the global financial crisis as the country went into coronavirus lockdown.

The nation's second-quarter contraction is meanwhile expected to be far steeper than the first.

Johnson will address the nation on Sunday evening to set out a "roadmap" for relaxing social distancing rules announced in late March.

Britain is banking on contact tracing, including via a smartphone app, to monitor transmission rates to prevent a second wave of infection.

He thanked the British people for heeding more than a month of stay-at-home orders.

Britain's nationwide lockdown was imposed on March 23, to halt the spread of the pandemic, but a new survey paints a devastating picture of the impact.

The government has also promised to ramp up testing of the virus, from 5,000 to 10,000 per day "by next week".

Bailey steps up from his role as head of the UK's financial regulator where he faced strong criticism over his role overseeing investment scandals in Britain.

On eve of Brexit, there is a strong possibility that the Bank of England will later Thursday announce its first interest rate cut in more than three years.