BoE will keep the bank rate on hold at 0.5% - Westpac
|Analysts at Westpac expect the BOE will keep the Bank Rate on hold at 0.5% at its February meeting.
Key Quotes
“In addition, the BOE is expected to maintain the very gradual tightening bias it adopted late last year, when it noted that some modest interest rate increases were likely over the next few years. The Governor’s recent comments suggest some risk that the MPC strengthens its rhetoric around the rates outlook. However, given the lingering downside risks for activity stemming from Brexit, we continue to see the risk that any tightening comes later, rather than sooner.”
“Inflation is sitting at the top of the BOE’s target band and while growth remains sluggish, spare capacity has been eroded and there are positive signs in parts of the economy. Against this back drop, BOE Governor Carney recently noted that “we’ve moved into a more conventional area for monetary policy where the focus is increasingly on returning inflation sustainably to target over an appropriate horizon.”
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