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MNI Gilt Week Ahead: Remit revision amid key BOE speak

We look at last last week's MPC speeches (particularly from Ramsden and Bailey), this week's upcoming speeches as well as the upcoming remit adjustment and syndication.

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  • Last week we heard from several MPC members, the most significant being a speech from Ramsden. We assign a 25% probability that he immediately switches his vote at the May MPC meeting.
  • We think that Bailey's comments were incrementally dovish, but not as much as the market pricing would suggest. We look at these speeches in more detail as well as upcoming speeches.
  • Furthermore, last week's inflation and labour market data saw the MNI Markets tweak our expectation of when the first hike will be: we now look for around a 10% probability of a first cut in May (down from 15% post-March MPC), have also reduced our expectation of a first cut in June to 30% (down from 35%), have maintained our 40% probability view of an August first cut but see a 20% probability (up from 10%) of the first cut being delayed beyond August.
  • This week also sees the flash PMI as well as public finance data. The latter is likely to lead to an upward revision to the FY24/25 gilt remit - we have seen estimates range from GBP6-13bln. We discuss this in more detail, too.
For the full MNI Gilt Week Ahead document which also includes a syndication previews for this week see:

GiltWeekAhead20240422.pdf

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  • Last week we heard from several MPC members, the most significant being a speech from Ramsden. We assign a 25% probability that he immediately switches his vote at the May MPC meeting.
  • We think that Bailey's comments were incrementally dovish, but not as much as the market pricing would suggest. We look at these speeches in more detail as well as upcoming speeches.
  • Furthermore, last week's inflation and labour market data saw the MNI Markets tweak our expectation of when the first hike will be: we now look for around a 10% probability of a first cut in May (down from 15% post-March MPC), have also reduced our expectation of a first cut in June to 30% (down from 35%), have maintained our 40% probability view of an August first cut but see a 20% probability (up from 10%) of the first cut being delayed beyond August.
  • This week also sees the flash PMI as well as public finance data. The latter is likely to lead to an upward revision to the FY24/25 gilt remit - we have seen estimates range from GBP6-13bln. We discuss this in more detail, too.
For the full MNI Gilt Week Ahead document which also includes a syndication previews for this week see:

GiltWeekAhead20240422.pdf