STIR: BoE's Greene Has Cautious Approach To Easing, 66bp Cuts Priced Thru '25

Cues from wider core global FI markets leave SONIA futures flat to +3.0, with a light rally seen early today.

• BoE-dated OIS flat to 1.5bp more dovish through ’25 meetings, pricing ~2bp of cuts for December, 19.5bp of cuts through January, 27bp of cuts through March, 46bp of easing through June and 66bp of cuts through December ’25.
• Little impact from BoE MPC member Greene’s address (which came after Monday’s close).
• Greene pointed to the need for a cautious approach to interest rate cuts, with UK services and wage inflation not coming down as quickly as she would like.
• She underscored expectations that wage growth would continue to ease along with inflation indicators generally moderating, although pointed to inflationary risks surrounding the Budget.
• A reminder that we previously identified Greene as a potential dissenter against the cut delivered at the November meeting, but she voted in line with the majority, supporting the latest leg of easing.
• Her latest comments suggest that she could potentially dissent against further cuts in the future, dependent on the evolution of the data.
• Elsewhere, former BoE official Stephen Millard told us that the Bank’s November forecast for inflation to eventually fall back below target relies on a hard-to-justify assumption of the appearance of an output gap
• Today will see BoE's Bailey, Lombardelli, Mann and Taylor appear at the latest Treasury Select Committee hearing (10:00 London).