10 Mar 2016
UK: Bank of England outlook – Rabobank
Research Team at Rabobank, notes that the BoE’s MPC voted unanimously in favour of steady policy in February as McCafferty retracted his previous preference for an immediate rate hike.
Key Quotes
“Despite the soft tone of the UK manufacturing data, the services sector and the labour market remain robust and Bank of England officials continue to promote the view that the next policy move will be a rate hike, albeit not for some months.
The money market is comfortable with the view that steady rates could prevail until the spring of 2017, although economists do see risks of a move at the end of 2016. If sustained, the weaker tone of GBP related to Brexit fears could increase inflationary potential in the UK. That said, the Bank could remain unimpressed unless wage growth and demand-led inflation also begin to pick up. We see November 2016 as the earliest potential date for a Bank of England hike.”
Key Quotes
“Despite the soft tone of the UK manufacturing data, the services sector and the labour market remain robust and Bank of England officials continue to promote the view that the next policy move will be a rate hike, albeit not for some months.
The money market is comfortable with the view that steady rates could prevail until the spring of 2017, although economists do see risks of a move at the end of 2016. If sustained, the weaker tone of GBP related to Brexit fears could increase inflationary potential in the UK. That said, the Bank could remain unimpressed unless wage growth and demand-led inflation also begin to pick up. We see November 2016 as the earliest potential date for a Bank of England hike.”