BoE Review: Preparing for an August hike – Nordea Markets
|Bank of England (BoE) left its policy rate and bond programme unchanged, but market perceived the decision as hawkish as chief economist Haldane joined the hawks by voting for a hike, according to Andreas Wallström, Chief analyst at Nordea Markets.
Key Quotes
“The MPC was split in its decision with Haldane, McCafferty and Saunders advocated to increase the bank rate by 25 bps. Chief economist Andrew Haldane is new in the hawkish camp.”
“The decision was seen as hawkish by markets with stronger sterling and higher rates. Market pricing implies close to 50% chance of a 25bps rate hike in August and a full hike is priced in at the end of 2018.”
“There were no new inflation report released but the minutes stated that “inflation is expected to pick up by slightly more than projected in May in the near term, reflecting higher dollar oil prices and a weaker sterling exchange rate”.”
“The minutes reiterated that “any future increases in Bank Rate were likely to be at a gradual pace and to a limited extent.”
“Today´s decision strengthened the case for a rate hike in August. For now, however, we stick to our forecast that the Bank of England leaves its policy rate unchanged throughout 2018 and 2019.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.