As expected, the Bank of England (BOE) left interest rates without changes yesterday, says CommerzBank’s currency analyst Michael Pfister.
Next cut of the BOE probably in August
“However, it was clear for the published details that the next cut of interest rates will probably occur in August. Although there were no new forecasts or an important press conference, yesterday’s vote was surprisingly adjusted, 6–3. Taking into account that the governor of the BOE generally votes with the majority, it was an adjusted decision.”
“In addition, the statement contained subtle indications that growth is still weak and that the labor market is cooling. Our economists predicted a cut of interest rates in August at the end of last year, and after yesterday’s decision, it is likely that it becomes the base scenario for the market.”
“Although more interest rate cuts will be made in a ‘gradual’ way, the market is likely to begin to discount stronger cuts after the recent weakest data and the increasingly moderate posture of the BOE. This is not a good sign for the pound.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
