Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Deutsche Bank halves UK growth forecast, predicts BoE cuts

03/05/2020 | 04:00am EDT
FILE PHOTO: People walk through autumnal leaves in front of the financial district in London

Deutsche Bank analysts have cut their forecast for British economic growth this year to just 0.5%, citing the rapid spread of the coronavirus and saying the Bank of England could cut interest rates twice by May in response.

Fears of a recession spurred the biggest stock market sell-off in a decade last week and many analysts have trimmed their growth projections, with Bank of America last week cutting its world growth forecast to 2.8%, the lowest since 2009.

DB economists Sanjay Raja and Oliver Harvey said weaker global growth, supply chain disruptions and subdued household demand would weigh on UK numbers this year and pulled forward their previous call for a quarter point cut in official interest rates from August to March.

They had previously expected growth of around 1%.

"We see a high risk of a further 25 basis point rate cut in May (by the Bank of England), though this will depend on the spread and duration of the crisis," they said in a morning note to clients.

"We also expect the MPC to announce a range of targeted measures aimed at increasing liquidity and loosening financial conditions, including a further roll out of the Bank?s term funding scheme alongside a drop in the counter cyclical capital buffer (for banks)," they added.

The Bank of England kept rates steady in January as it saw signs of a post-election pick-up and its next governor, Andrew Bailey, on Wednesday said it should hold off with any immediate response to the coronavirus outbreak.

Investors, however, have ramped up bets that the BoE will follow the lead of the U.S. Federal Reserve and the Bank of Canada and cut rates, possibly before its first scheduled policy announcement under Bailey on March 26.

(Reporting by Jasmine I S and Tanvi Mehta in Bengaluru; editing by Patrick Graham)


ę Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
BANK OF AMERICA CORPORATION 3.86% 41.69 Delayed Quote.37.55%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.05% 0.78955 Delayed Quote.-0.40%
EURO / BRITISH POUND (EUR/GBP) -0.02% 0.8554 Delayed Quote.-3.93%
Latest news "Economy & Forex"
05:57pProsecutor offers SNC-Lavalin to negotiate remediation deal in bridge fraud case
RE
05:47pDogecoin Lost 2.17% to $0.222 at 5 p.m. ET -- Data Talk
DJ
05:46pEthereum Gained 3.84% to $3142.44 at 5 p.m. ET -- Data Talk
DJ
05:46pBitcoin Gained 2.84% to $44678.68 at 5 p.m. ET -- Data Talk
DJ
05:44pLIVESTOCK-CME lean hogs firm on China's herd restrictions
RE
05:42pU.S. CDC Reports Total Deaths Of 680,688 Due To Coronavirus As Of Yesterday
RE
05:42pU.s. cdc reports total novel coronavirus cases of 42,501,643 as of yesterday vs 42,363,951 in previous report on sept 22
RE
05:42pU.s. cdc reports total deaths of 680,688 due to coronavirus as of yesterday vs 677,086 in previous report on sept 22
RE
05:41pCostco wholesale corp - says it is paying 6 times for containers and shipping due to price increase on items shipped across the oceans - conf call
RE
05:36pCostco wholesale corp - says it has chartered 3 ocean vessels for the next year to transport containers between asia and the u.s. and canada - conf call
RE
Latest news "Economy & Forex"