Guardian Stockbrokers Key Economic News Friday 8 November 2019

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The key points from today’s economic news, brought to you by Guardian Stockbrokers.

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BoE keeps its key interest rates unchanged

The Bank of England (BoE), in its latest monetary meeting, kept its benchmark interest rate unchanged at 0.75%, even though two officials unexpectedly voted to lower interest rates. Meanwhile, the BoE Governor, Mark Carney, stated that the rate cut would be considered, if global and Brexit tensions do not ease. Additionally, he indicated that the British Prime Minister, Boris Johnson’s new Brexit deal has helped to reduce some uncertainty and stated that business investment could pick up.

UK Halifax house price index unexpectedly eased in October

In the UK, the Halifax house price index unexpectedly eased 0.10% on a MoM basis in October. Markets were anticipating the index to advance 0.30%.

ECB sees modest but positive growth in the second half

The European Central Bank, in its monthly Economic Bulletin, indicated that the Euro-zone economy will continue to observe moderate but positive economic growth in the second half of the year, lifted by private consumption and a slight growth in employment. However, risks to the global economy remain to the downside, amid a further escalation of trade disputes, uncertainties surrounding Brexit and a potentially slowdown in global economy.

EU Commission lowers Euro-zone growth forecast

The European Union Commission, in its latest report, trimmed its growth forecast for the Euro-zone’s economy to 1.1% in 2019 and to 1.2% in 2020, amid global trade disputes, geopolitical tensions and Brexit. Further, the Commission forecasted the region’s aggregate budget deficit to rise to 0.8% in 2019 and to 0.9% in 2020 and 1.0% in 2021, up from an historic low of 0.5% of GDP in 2018. Also, it expects inflation to be at 1.2% this year and next, rising to 1.3% in 2021.

German industrial production declined less than expected in September

In Germany, seasonally adjusted industrial production dropped more than expected by 0.6% on a MoM basis in September. In the previous month, industrial production had recorded a revised rise of 0.4%.

RBA to further ease monetary policy, if required

The Reserve Bank of Australia (RBA), in its latest monetary policy statement, revealed that the Australian economy was ‘gradually coming out of a soft patch’. The central bank highlighted concerns that it is running out of room to cut interest rates further and warned that additional rate cuts might backfire by affecting consumer sentiment. Further, the RBA forecasted a subdued wage growth of just 2.3% up to the end of 2021.

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