HALISTER1: Pantheon Expects BOE to Cut Rates by 25bps, Most Likely in Aug.

Pantheon Expects BOE to Cut Rates by 25bps, Most Likely in Aug.

(Bloomberg) -- Base case now is that the MPC cuts interest rates to 0.25% from 0.5%, Pantheon analyst Samuel Tomb writes in client note, after governor Mark Carney says the BOE will probably have to loosen policy within months.
  • August is the most likely month for action, but a move in July clearly is possible; the timing and extent of easing are very dependent on how market conditions evolve over coming weeks
  • Expects the Bank to hold back from easing policy beyond that due to the much higher outlook for inflation; doesn’t expect any asset purchases
  • Pantheon didn’t previously expect the BOE would cut rates
  • NOTE: GBP OIS markets price 98% chance of a 25bps rate cut in August
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Mark Carney (Bank of England/London)
Samuel Tombs (Pantheon MacRoeconomics Inc)

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