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Central Banks: ECB and BoE

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Preview of Jun 5 meetings

Thu, Jun 5 2008, 08:26 GMT
by Marina Schiaffino

FXstreet.com

ECB and BoE monetary policy committees will announce today their latest monetary policy decisions. Both are expected to keep their key interest rates unchanged, taking in account the fast growing inflation driven by soaring energy prices. The ECB stands at 4% right now, while the BoE is at a higher 5%.

The Bank of England’s monetary policy committee ruled out last month two back-to-back rate cuts, a 25 basis point rate cut was approved in April, to stimulate economy, with inflation growing at a pace well above the 2.0% upper limit of the Bank’s margin for price stability.

The ECB faces a rather similar situation, although in this case interest rates have been steady at 4% since June 2007, the odds for a rate cut are minimal. The OECD, in its economic outlook considers the Euro Zone’s monetary policy as finely balanced between upside risks to inflation and downside risks to growth.

Check the effect that the meetings have over the pairs in our Rates and Charts Section or compare the movements of the different banks in our World Interest Rates Table. And remember that you can attend to our special live coverage: "BoE, ECB and Trichet's Speech Live Coverage with Dr. S. Sivaraman" on Thursday June 5, at 10:45GMT, both from FXstreet.com or from the proper event in the Economic Calendar.

• · ECB homepage
• · BoE homepage
  
  

In-Depth Analysis

• · Daily Forex Technical Report - ECB & BOE Watched, Yen and Kiwi Sold off by ActionForex.com
• · Spot Forex Trades - Bank after Bank to end Blank! by ForexSurvivor
• · aily Forex Outlook - ECB and BoE interest rates in focus by Easy Forex
• · ECB: Preview of meeting on June 5 by Danske Bank A/S
• · European Market Update - Markets in a Lull Ahead of this Week's European Rate Decisions and US Payrolls Data by TradeTheNews.com
• · Friday Notes - Central Banks – On hold for now, but heading down different tracks later by HVB Group
• · Monetary-policy meeting at the Bank of England by Jyske Bank
• · Euroland: ECB rate cuts postponed by Danske Bank A/S
• · EMU economic indicators - ECB set to keep refi rate unchanged by BHF-Bank
• · Economics Weekly - UK inflation expectations take-off makes cutting rates difficult by Lloyds TSB Financial Markets
  
  

Related News

• · ECB and BoE will, most likely, keep rates on hold tomorrow (FXstreet.com)
  
  

Analysts' comments

• · Holger Schmieding, economist at Bank of America:
  "We consider any talk about a possible ECB rate hike in late 2008 as premature to put it mildly. We would need to see a convincing recovery of the euro zone economy from its imminent slowdown first." - Dow Jones
• · James Knightley, strategist at ING Financial Markets:
  "Inflation pressures remain the main concern for the BOE in the near-term and will certainly keep the BOE on hold tomorrow. However, with the manufacturing PMI showing no growth and the construction and service sector PMIs in contraction territory, the recession risks are intensifying." - Dow Jones
• · Michael Woolfolk, economist at Bank of New York:
  "While a positive surprise to Friday's payrolls appears increasingly likely, there is a understandable element of caution ahead of tomorrow's ECB and BOE meetings. Once this event risk has passed, expect the dollar to gain ground on the recent positive US data and in anticipation of a positive surprise to non-farm payrolls." - Thomson Financial News
  
  

Published on  Thu, Jun 5 2008, 08:35 GMT