BOE Preview: Bank to signal a potential rate cut in Feb - Rabobank
|Analysts at Rabobank published its preview on the BOE interest rates decision due later this week, noting that Brexit-related headwinds to the UK economy is likely to prompt the BOE to potentially act in Feb next year.
Key Quotes:
“In recent weeks speculation that the BoE was poised to cut rates again at the November policy meeting have dissolved.”
“In spite of the MPC’s clear guidance in September that rates could be cut again this year, the evidence has mounted that this may not be a prudent decision by the Bank.”
“The plunge in GBP during early October is the main reason why we have been forecasting steady rates in November and recent comments from BoE Governor Carney have strengthened this view.”
“The better than expected outcome for UK Q3 GDP data have added to market expectations that the Bank will opt leave rates unchanged at the November MPC meeting.”
“That said, we would expect the Bank to retain its focus on the vulnerability of the economy to Brexit related headwinds.”
“For this reason we expect the Bank to leave the door wide open for a potential rate cut in February.”
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