BOE to Cut Rates in Aug. and Nov., Other Measures Possible: JPM
Source: BFW (Bloomberg First Word)
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Allan Monks (JP Morgan Chase)
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UUID: 7947283
(Bloomberg) -- The BOE’s decision to refrain from easing today raises questions over the timing of future stimulus and whether officials see zero rates as viable, JPMorgan analyst Allan Monks writes in client note.
Alert: HALISTER1- BOE to cut rates 25bps in August and another 25bps in November
- Sovereign QE to be resumed next month; hard to be confident about the magnitude
- Previous QE forecast was GBP75b over 6 months along with November Inflation Report at the latest; previously projected 25bp cuts in July and August
- Possible MPC will cut rates 50bps in August and defer QE until later
- Carney’s skepticism about negative rates and the July minutes may be a hint the MPC could lean more toward QE than ZIRP
- Other measures such as small-scale purchases of corporate bonds or extending the FLS are likely to depend on a deterioration in market conditions or an increased demand for funding
- NOTE: BNP Paribas no longer expects BOE to lower rates to zero, continues to see a 25bp cut and GBP50b of QE in Aug.
Source: BFW (Bloomberg First Word)
People
Allan Monks (JP Morgan Chase)
To de-activate this alert, click here
UUID: 7947283