Free Trial

Re-Run: POV: BOE RATE HIKE NAILED ON, EYES ON...>

BOE
BOE: Re-Run: POV: BOE RATE HIKE NAILED ON, EYES ON R*
-MNI'S PINCH model sees the likelihood of a 25bps hike at comfortably over 90%,
leaving any market reaction a function of the MPC vote split and the publication
of r* (on the condition that the rate hike is delivered in the first place).
-The publication of r* may complicate matters. Firstly, it's likely to detail a
range of rates (rather than a specific level) and secondly, the MPC may stress
that its assessment is fluid and will change over time, meaning r* is subject to
economic developments over the forecast horizon - hardly the clear cut policy
message some participants expect.
-Hawkish: Unanimous 9-0 vote to hike twinned with a nominal equilibrium bank
rate range toward the upper end of the previously cited 1-3% band.
-Neutral: A hike with Cunliffe the sole dissenter and a cloudy nominal
equilibrium bank rate range as wide as 1-3%.
-Dovish: A split vote of 7-2, or even 6-3 (particularly if Carney is in the
minority), would drill yields and GBP lower. This would be compounded by a
nominal equilibrium bank rate range estimate toward 1.5-2.0%.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.