BoE: No surprises offered - ANZ

Sandeep Kanihama FXStreet Contributor

The BoE left rates unchanged as expected and the committee voted 6-2 to keep rates on hold, with McCafferty and Saunders voting for hikes, notes the analysis team at ANZ.

Key Quotes

“GDP forecasts were lowered, wage growth seen weaker (3% vs 3.5% next year) and uncertainty in regard to Brexit acknowledged. That is not the backdrop to lift rates near term if you believe that the inflation rise is temporary and a result of sterling's post referendum weakness.”

“The Governor noted that Brexit is casting a big shadow over the outlook and confidence in an orderly exit is starting to fade with EU negotiations the most important factor for the outlook. Inflation is seen at 2.2% in three years and the BoE envisages two rate hikes over that period, the first in Q3 next year as spare capacity is absorbed, but there seems a lot of uncertainty around that. Separately, the ECB noted a “substantial degree of stimulus is still needed”.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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