Bank of England to leave interest rates at 0.5% until well into next year

Decision by 8-1 will reassure businesses and households as MPC gives no indication of imminent rise, while Bank cuts inflation forecast

The Bank of England is ready to step up controls on the housing market if a prolonged period of record low interest rates risks inflating a property bubble, governor Mark Carney has said. As he signalled that interest rates were likely to remain on hold well into next year, Carney suggested the Bank may have to revert to other measures, such as tighter lending rules, to keep a lid on house prices.

Speaking after news from lender Halifax that house prices had jumped almost 10% from a year ago, he raised concerns that households were saving less and that some would end up overstretching themselves. More action could be warranted from the Bank, which has the power to clamp down further on mortgage lending as part of its macro-prudential tools.

Related: Interest rate decision shows Bank of England doves still rule the roost

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Thomas Piketty proposes flight tax to raise climate funds

French economists moot €180 levy on business class tickets to help vulnerable countries adapt to the impacts of climate change, reports Climate Home

Air travel should be taxed to protect the world’s vulnerable from drought, flooding and sea level rise.

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Bank of England Super Thursday and Volkswagen sales slump – business live

All the latest financial news, including the UK interest rate decision and new VW car sales figures

  • UK interest rate decision comes at noon
  • Economists expect deeper split over rate hike
  • UK car sales finally stop rising
  • Volkswagen sales slide in South Korea, and UK

UK SMMT 177,664 new cars were registered in the month, representing a slight decrease of 1.1% Food for thought for the Bank of England #GBP

Mike Hawes, SMMT Chief Executive, argues that the UK car sector is still robust, even though sales growth has finally dipped.

“The UK car market has gone through a period of unprecedented growth and, so far, 2015 has been a bumper year with the strongest performance since the recession.

As expected, demand has now begun to level off but the sector is in a strong position, as low interest rates, consumer confidence and exciting new products combine to attract new car buyers. The current full-year growth forecast remains on track.”

Volkswagen sales in the UK have fallen, suggesting the company has been hurt by the news that it faked emission test results.

Sales of Volkswagen models tumbled by 9.8% year-on-year in October, from 15,495 to 13,970, according to the SMMT’s new report. That means its market share shrank from 8.62% to 7.86%.

#Volkswagen UK sales fall in October – market share falls by almost 10%. @SMMT

Just in. UK car sales have fallen, for the first time since early 2012.

The Society of Motor Manufacturers and Traders reports that new registrations were down 1.1% in October, compared with a year ago.

Jeremy Cook, chief economist at currency firm World First, reckons UK interest rates will remain at their record lows for another six months.

#SuperThursdayGuesses Today to solidify expectations, Feb to signal its coming soon, and May to hike. Slowly, slowly catch the Carney

#SuperThursdayGuesses Possibility that Forbes joins McCafferty, minutes focus on solid yet unspectacular growth, inflation from base effect

London newspaper City AM runs a ‘shadow MPC’, asking nine senior economists how they would vote.

And this month, it has split 6-3, with a trio calling for a rate hike.

Raise. Corporate liquidity is surging. Private pay growth is over three per cent, while productivity remains sluggish. Global risks have faded.

I am one of 3 members of @CityAM MPC to vote for a rate rise: How many on the real #MPC will follow suit today?

Here’s a handy chart showing which BoE policymakers appear keen to raise rates soon, and which are reluctant….

The MPC Member Spectrum, from doves to hawks – loving it @business Intelligence & @JMurray804

Some economists believe that divisions at the Bank of England over interest rate policy will widen today during Super Thursday.

At recent meetings, the monetary policy committee has split 8-1, with only Ian McCafferty voting to hike borrowing costs from 0.5% to 0.75%.

It’s Bonfire Night, and if there are fireworks here, it will be in the vote.

Kristin Forbes has been very hawkish of late, and she may go and join McCafferty, and possibly Martin Weale too.

Today is probably the Bank of England’s last chance to prepare people for an interest rate hike early next year.

Brian Hilliard, chief U.K. economist at Societe Generale, explains:

“It’s make or break for clear communication on a first-quarter rate increase.

“If it is going to happen in February they’re going to have to send a strong and clear signal.”

As if the Volkswagen scandal wasn’t bad enough, Germany’s factories have also suffered another drop in demand orders.

New orders in #manufacturing in Sept. 2015: –1.7% seasonally adjusted on the previous month

German new orders down for the third straight month. No more excuses except domestic demand still bit stronger.

Three months in a row with month-on-month declines over 1%. Last time that happened was November 2011. #NichtGut

We have firm evidence that the emissions scandal has hurt Volkswagen, from South Korea.

Happy Super Thursday!

#UK economy today: BOE rate decision, minutes, Inflation Report

Related: VW could face billions in car tax repayments over latest CO2 scandal

Grim retail. Morrisons – total sales down 2%; like-for-like sales down 2.6%; food deflation -2.2%. Every figure in trading statement is -ve

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Robot revolution: rise of machines could displace a third of UK jobs

Global economy will be transformed over next 20 years at risk of growing inequality, say analysts

A “robot revolution” will transform the global economy over the next 20 years, cutting the costs of doing business but exacerbating social inequality, as machines take over everything from caring for the elderly to flipping burgers, according to a new study.

As well as robots performing manual jobs, such as hoovering the living room or assembling machine parts, the development of artificial intelligence means computers are increasingly able to “think”, performing analytical tasks once seen as requiring human judgment.

Related: Robot doctors and lawyers? It’s a change we should embrace | Daniel Susskind

Related: Robots can take over some of our jobs. But some things only humans can do | Brooks Rainwater

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Free market thinktank federal UK radical devolution

Institute for Economic Affairs report says stripping Whitehall of most of its powers would create 6% rise in living standards

Stripping Whitehall of the bulk of its powers through a process of sweeping devolution would raise living standards in the UK by 6%, a leading free-market thinktank has said.

The Institute for Economic Affairs said Britain would be richer with a fully federal system in which central government would have control over defence, foreign affairs and border control and all other responsibilities would be passed down to local authorities.

Related: Devolution revolution? Not until there’s real public service reform

The UK’s approach to devolution is incoherent and unstable

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Room for debate on the UK’s rising population | Letters

Zoe Williams puts forward an extraordinary argument (There’s plenty more space for humanity on this ‘tiny’ island, 2 November). She suggests that because “only” 10.6% of England’s land area is urbanised there is room for a great many more people than currently live here. This ignores lots of things, but let’s focus on one: food.

Despite an intensive agriculture that depends heavily on pesticides, fertilisers and diesel fuel for tractors, neither England nor the UK is self-sufficient in food. In fact we import 40% of our food, and the proportion is rising. That might not matter if we could be sure that we’ll be able to import food in increasing quantities.

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Janet Yellen says December interest rate hike is still on the table

Federal Reserve chair tells House committee that no decision has been made but a rise in rates is still a ‘live possibility’ despite continued low inflation

A December interest rate increase is still on the table, US Federal Reserve chair Janet Yellen said Wednesday during testimony before the House financial services committee.

Asked by New York congresswoman Carolyn Maloney, a Democrat, whether the risk of raising rates in December outweigh the benefits, Yellen said that the committee has made no decision yet but that December rate hike was still a “live possibility”.

Related: Federal Reserve keeps interest rates unchanged but hints at December rise

Bill Dudley on December liftoff: "I fully agree with the Chair. It is a live possibility, but let’s see what the data shows"

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British service sector back in growth, latest data reveals

Monthly Markit/CIPS services PMI survey shows more job creation and employment in UK’s leisure and IT industries

The UK’s dominant service sector moved back into growth in October, but the rate of expansion remained weak, a new survey shows.

The rate of growth for service industries, which span hotels, restaurants, IT and finance, rose for the first time since June, according to the monthly Markit/CIPS services PMI published on Wednesday.

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