Bloomberg on BOE: Tough to talk about raising rates while lowering growth forecasts
|Bloomberg macro strategist Mark Cudmore out with key thoughts heading into today’s BOE ‘Super Thursday’.
Key Points:
Pound saw a rally when Carney suggested a hike may be imminent about a week after the last MPC meeting. Since then, data has generally missed on the downside and he will have to dial back expectations.
Economic momentum has slowed, real incomes squeezed in a highly leveraged private sector.
Majority of economists expect BOE to cut its growth forecasts today. Tough to talk about raising rates while lowering growth forecasts.
Although inflation is high, inflation expectations have been falling for months, as per five-year breakevens.
Base effects from currency drop will start to fall out of the inflation measure soon.
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