BoE Preview: Major Banks expecting BoE to maintain status quo on rates

Today, we have the last meeting of BoE for this year and as we head closer to the decision timings, here are the expectations as forecasted by the economists and researchers of major banks for the upcoming meet.

Most of the banks don’t expect the BoE to alter its monetary policy in December and suggest that it is not expected to give any major signals.

Danske Bank

“The Bank of England (BoE) is expected to keep the Bank Rate unchanged and as it is an interim meeting with no Inflation Report, we do not expect any major new signals. The BoE is in a wait-and-see mode to see how the Brexit deal ends up.”

TD Securities

“We expect the BoE to adopt a somewhat more cautious tone at its Thursday decision as the MPC unanimously keeps Bank Rate on hold. Despite a healthy labour market, inflation has come in below the BoE's forecast, domestic activity has completely stagnated, the international backdrop is weaker, and Brexit uncertainty has intensified. The MPC is likely to repeat that rates will rise "at a gradual pace and to a limited extent".”

Rabobank

“We don’t expect the Bank of England to alter its policy settings at the December meeting. The meeting in May offers the best hope of a hike to 1.00%, but this assumes that the UK will be leaving the EU with a deal in place. Should the UK leave the EU without such a deal, we expect the MPC to have a hard time laying the groundwork for rate hikes. Then again, we don’t expect another round of easing either.”

ING

“For the Bank of England what really matters here is the recent acceleration in wage growth. This is a key reason why policymakers appear keen to tighten policy further, although given all the noise surrounding Brexit, it’s looking increasingly likely that the central bank will remain on hold through the first half of 2019 (and possibly beyond).”