Danske Research Team
Danske Bank A/S
Bank of England Governor Mark Carney delivered a very dovish speech today, stating that "the economic outlook has deteriorated" due to Brexit uncertainties and that he personally thinks "some monetary policy easing will likely be required over the summer" . Carney said that he viewed the two meetings in July and August as a " package " and that BoE will publish the first full projections after Brexit in the next Inflation Report due in August. We believe the BoE will eventually cut the bank rate to 0.00% from 0.50% and to expand the Asset Purchase Facility (APF) by GBP150-200bn.
Nomination for the UK Conservative party leadership closed today. Surprisingly, the favourite Boris Johnson is not in the race while Justice Secretary Michael Gove is. It was expected that the two would launch a common bid. Home Secretary Theresa May announced her candidacy today as well. We are now down to five candidates: Theresa May, Michael Gove, Stephen Crabb, Liam Fox and Andrea Leadsom. After Boris Johnson is out of the race, Theresa May is the clear favourite to succeed David Cameron as UK Prime Minister with Michael Gove and Stephen Crabb as outsiders. At her press conference Theresa May said " Brexit means Brexit " as the referendum result was clear with high turnout. She ruled out a second referendum and early general election before 2020. She also said that Article 50 will not be triggered before year-end due to negotiation preparations.
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