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BoE is here, but no rate hike in sight - Rabobank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 4, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Bas van Geffen, Quantitative Analyst at Rabobank, suggests that today the Bank of England will announce its rate decision, but the rate hike that seemed so near last year is now nowhere in sight.

    Key Quotes

    “Indeed, in a recent speech Governor Carney changed his tone to a clearly more dovish “now is not yet the time to raise interest rates” – something the market has been saying for a while already. Although economic growth picked up somewhat in the final quarter of 2015, the UK economy in particular the manufacturing and construction sectors– still shows signs of weakness.

    Market pricing even suggests that there is a greater chance of a rate cut than a hike this year as risks remain present. Externally from global growth, which is at risk of emerging market slowdown. But also the uncertainty of the ‘Brexit’ referendum that currently clouds the UK outlook. Given these risks, the BoE probably won’t join the Federal Reserve on the path upwards soon – we currently expect no rate hikes from the Bank until at least November.”
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