BoE expected to remain on hold for the time being

Lee Sue Ann, Economist at UOB Group, gave her views on the latest releases in the UK docket and the BoE event.

Key Quotes

“The latest slew of economic data out of the UK is likely to intensify pressure on the BoE. Last week, the BoE’s monetary policy committee (MPC) was divided over whether to reduce rates, with two of the nine-member committee voting for a 25bps rate cut from the current 0.75% rate”.

“This was the first time that there were votes for a lower policy rate since 2016, and the first MPC decision that was not unanimous since June 2018. The dissent by Michael Saunders was particularly significant, because it was only about 18 months ago that he had been the outlying vote for a rate hike. That said, his recent comments had marked him as an emerging dove, whereas Jonathan Haskel’s vote for a rate cut came as a total surprise”.

“Despite the dovish tilt at the 7 November meeting, we expect the BoE to be in a wait-and-see stance. We believe that the two dissenters against a large majority is still somewhat premature in tipping the balance for a rate cut, especially with a no-deal Brexit scenario off the immediate agenda. We would prefer to wait for the outcome of the impending election and its subsequent impact on how Brexit may proceed, before making changes to our forecasts”.

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.