BoE: We no longer expect a rate cut next year - Danske Bank
|After today’s statement from the Bank of England, analysts from Danske Bank, changed their view and now they don’t expect a rate cut in the interest rate next year.
Key Quotes:
“As expected, the BoE left its monetary policy unchanged at the November meeting. Bank Rate was kept at 0.25%, the target for the stock of government bond purchases and the target for the stock of corporate bond purchases were kept at GBP435bn and GBP10bn, respectively, and there were no changes to the new Term Funding Scheme (TFS).”
“It seems that the BoE is quite satisfied that its actions have supported the economy and moved inflation back to higher levels consistent with the 2% target. The BoE now expects higher short-term real GDP growth as economic data so far has been resilient. The bank also expects CPI inflation to
be higher than the August projections as the GBP has depreciated further.”
“BoE’s shift to neutral bias and resilient economic data mean we no longer expect the bank to ease monetary policy further (previously we expected a cut in February). While we think it is unlikely that the BoE will tighten monetary policy in a time of elevated political uncertainty, we think we need to see slower growth and/or higher unemployment before easing becomes likely again.”
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