BoE: Expect no change at today’s meeting - Rabobank

Bas van Geffen, Quantitative Analyst at Rabobank, explains that they expect no change at today’s Bank of England meeting, and also expect steady policy well into next year and potentially through into 2019.

Key Quotes

“BoE’s forward guidance this year has been balanced, while the May Inflation Report did produce a couple of hawkish takeaways. Specifically the Committee judged that “if the economy follows a path broadly consistent with the May central projection, then monetary policy could need to be tightened by a somewhat greater extent over the forecast period than the very gently rising path implied by the market yield curve underlying the May projections”. The Bank’s projections, however, were based on the assumption of a smooth Brexit and on the judgement that the factors that are bearing down on wage growth are unlikely to persist. Both of these assumptions could prove to be optimistic.” 

“Additionally, more political uncertainty following the surprise result of the snap elections can have a negative impact on investment activity.”