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BoE ‘on hold’ until early 2017 – Rabobank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 5, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Analyst at Rabobank Carlijn Prins believes the BoE could hike rates in February 2017.

    Key Quotes

    “BoE Governor Carney recently admitted that Brexit was the greatest domestic financial risk to the UK. The sharp drop in the value of the pound during Q1 reflects the impact of the uncertainty”.

    “While a weaker pound may bring a benefit to exporters and push UK CPI inflation back to the Bank’s 2% target a little quicker than estimated just a few months ago, political uncertainty could also negatively impact investment”.

    “Additionally, it is impossible to predict with any accuracy how a Brexit would impact the UK’s trading relations with the EU and thus there is a wide margin for error in post Brexit growth forecasts”.

    “We expect the BoE will retain a cautious policy stance in the current environment and see no rate hike before February 2017”.
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