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11 May 2015
BoE leaves monetary policy unchanged – ING
FXStreet (Barcelona) - James Knightley, Senior Economist at ING, reviews today’s BoE’s interest rate decision, and further comments on expectations from Wednesday’s inflation report.
Key Quotes
“The Bank of England has left monetary policy unchanged as expected. Attention now moves to Wednesday’s Inflation Report and press conference, which will give us an update of the MPC’s thinking following the General Election.”
“Now that the political uncertainty has cleared the BoE can focus once again on the data, which in general shows an economy that is performing well with little near-term inflation threat. Indeed, wage growth remains modest and headline inflation is at zero.”
“However, there have been some encouraging signs on the Eurozone economy while domestic survey evidence suggests 2Q UK GDP should bounce back after a disappointing 0.3% QoQ reading for 1Q15. The labour market also remains firm.”
“It was interesting to see in the minutes to the April decision that the BoE noted “the path of Bank Rate expected by financial markets was now exceptionally flat”. Those minutes also reported that for two MPC members the decision whether to vote for a rate rise or not was “finely balanced”.”
“We wouldn’t be surprised to see the BoE nudge up their inflation forecasts on Wednesday and perhaps emphasise a little more forcibly that the prospect of interest rate rises is getting closer.”
Key Quotes
“The Bank of England has left monetary policy unchanged as expected. Attention now moves to Wednesday’s Inflation Report and press conference, which will give us an update of the MPC’s thinking following the General Election.”
“Now that the political uncertainty has cleared the BoE can focus once again on the data, which in general shows an economy that is performing well with little near-term inflation threat. Indeed, wage growth remains modest and headline inflation is at zero.”
“However, there have been some encouraging signs on the Eurozone economy while domestic survey evidence suggests 2Q UK GDP should bounce back after a disappointing 0.3% QoQ reading for 1Q15. The labour market also remains firm.”
“It was interesting to see in the minutes to the April decision that the BoE noted “the path of Bank Rate expected by financial markets was now exceptionally flat”. Those minutes also reported that for two MPC members the decision whether to vote for a rate rise or not was “finely balanced”.”
“We wouldn’t be surprised to see the BoE nudge up their inflation forecasts on Wednesday and perhaps emphasise a little more forcibly that the prospect of interest rate rises is getting closer.”