Bank of England: No rate hike until November 2016 at the earliest – Rabobank

By FXStreet FXStreet (Córdoba) – According to analysts from Rabobank, next week the Bank of England will keep rates unchanged and the Inflation Report will show a more gradual path. They see no rate hike at least until November.

Key Quotes:

“Market skepticism on the ability of the BoE to hike rates has continued to grow. As it stands the SONIA curve implies a greater chance of a BoE rate cut than a hike in the period out to March 2017.”

“Money market rates have been more dovish on the outlook for BoE policy than the consensus of economists for some months. The latest Reuters BoE Monetary Policy poll has indicated a shift in economists’ expectations for the first BoE rate hike of the cycle to Q4 2016 from Q2 2016 in the previous survey. The UK money market has also lost confidence in the BoE’s tightening cycle. As it stands the SONIA curve implies a greater chance of a BoE rate cut than a hike in the period out to March 2017. We see no interest rate hike until November 2016 at the earliest.”

“The Bank’s updated projections is for CPI inflation to increase slightly more gradually than the path described in the …read more

Source:: FX Street