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11 May 2015
BoE November rate hike expected – Danske
FXStreet (Barcelona) - Reviewing the BoE’s policy rate decision, Analyst at Danske Bank, Mikael Olai Milhøj, further shares the key central bank data ahead for UK, and maintains the November forecast for a rate hike.
Key Quotes
“As expected, the Monetary Policy Committee (MPC) voted to maintain the Bank Rate and the stock of purchased assets at 0.50% and GBP375bn, respectively.”
“We will get much more information about the MPC’s overall view on the economy when the Inflation Report is released on Wednesday. We expect the projected inflation path to be revised up slightly and the GDP growth to be revised down slightly.”
“We will also look for any comments on wage growth, which continues to be an important factor for the timing of the first hike.”
“The minutes from the MPC’s May meeting are released on 20 May and will also provide us with more information on the MPC members’ individual view.”
“We still expect the MPC to hike in November this year. Although headline inflation is likely still to be low at this point, we think that the MPC members will judge that the medium-term inflation outlook calls for tighter monetary policy.”
“It is important to remember that the low inflation is mainly due to falls in energy and food prices, which should begin to drop out at the end of this year.”
“As the MPC recognises that monetary policy works with a lag, the falls in energy and food prices alone cannot justify holding off from raising rates. We expect the Inflation Report to support this view.”
Key Quotes
“As expected, the Monetary Policy Committee (MPC) voted to maintain the Bank Rate and the stock of purchased assets at 0.50% and GBP375bn, respectively.”
“We will get much more information about the MPC’s overall view on the economy when the Inflation Report is released on Wednesday. We expect the projected inflation path to be revised up slightly and the GDP growth to be revised down slightly.”
“We will also look for any comments on wage growth, which continues to be an important factor for the timing of the first hike.”
“The minutes from the MPC’s May meeting are released on 20 May and will also provide us with more information on the MPC members’ individual view.”
“We still expect the MPC to hike in November this year. Although headline inflation is likely still to be low at this point, we think that the MPC members will judge that the medium-term inflation outlook calls for tighter monetary policy.”
“It is important to remember that the low inflation is mainly due to falls in energy and food prices, which should begin to drop out at the end of this year.”
“As the MPC recognises that monetary policy works with a lag, the falls in energy and food prices alone cannot justify holding off from raising rates. We expect the Inflation Report to support this view.”