Analysts at Citigroup argue that the Bank of England (BOE) is likely to refrain from raising interest rates in the coming months amid looming no-deal Brexit risks, which is likely to keep the GBP undermined.
The BOE will announce its monetary policy decision on Thursday alongside the meeting’s minutes.
“The BOE raised GDP expectations across the forecast horizon earlier. A Brexit deal (or longer extension) is a likely precondition to any hike in 2019. However, the political backdrop remains the biggest risk to GBP
We no longer see a Bank Rate hike in August or indeed this year as likely, as no-deal could become a bigger risk quickly, with the dovish wind blowing through global monetary policy. This will likely be GBP-negative.”
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