With a certainty you could have hammered a steel bar around, the Bank of England today cut interest rates to a historic low of 0.25 per cent.
It was a record so widely anticipated, that the scribblers at CN towers didn’t for once find themselves flooded with press releases along the lines of ‘trade body reacts to record-breaking move’.
Along with the concomitant £60bn of quantitative easing (taking the total to £435bn), it probably wasn’t the inevitability of the move that dammed this deluge, rather than the “ummm…. What happens next-ness?”
BoE governor Mark Carney hinted that the measures had been taken to prevent a possible recession, describing the measures as “timely”.
Halving the new interest rate was a move that demonstrated the desperate need to intervene, with the BoE already having its back to the wall at the previous rate of 0.5 per cent, making it hard to predict what difference it will really make.
When I spoke to Imtech CEO Paul Kavanagh for our forthcoming annual CN100 that ranks and examines the top 100 contractors, he had an air of fait accompli in terms of calling the market.
While noting that the firm’s order book had been steadily strengthening for two years, he said long-term pipelines were getting harder to predict and that Brexit had only added to that frustration.
“We came to the conclusion that long-term speculation is pointless, there is more uncertainty generally around long-term forecasting,” he said. “Our immediate order book looks good and a bit beyond that, but the longer term is unknowable.”
Talking of steely certainty, though, wouldn’t a bit of further weakening of sterling (it fell about 1 per cent against both the dollar and the euro with the rate-cut announcement) mean good things for the embattled UK steel industry?
It’s hard to look for silver linings at a time of ambiguity, and when you do, it’s a bit like saying that when the plague comes to town, at least undertakers get to do backflips.
But before this briefing gets too gloomy, let’s bear in mind that the BoE is still forecasting growth for 2017, even if it is at a far more measured 0.8 per cent from the 2.3 per cent envisaged pre-Brexit.
And in any event, governor Mark Carney has indicated there is still scope to cut the interest rate further. Not that much, it has to be said, but let’s take the positives right?
Tomorrow on CN:
We’ll have NG Bailey’s 2015/16 results and an interview with chief executive David Hurcomb going out on our breaking news alert at 7am. Sign up here, if you don’t receive them.
Tomorrow is the final day of CN’s inaugural Tech Week. We’ll have a look at how Bam Nuttall is working with a start-up to develop innovative concrete strength testing technology, and features editor Daniel Kemp’s new weekly tech blog kicks off.