BoE Watch

Quick read
Divyang Shah

Once again the BoE meeting has ended with the usual outcome of a 8-1 vote for unchanged rates and minutes that provide very little insight on the policy outlook.

The next key focus will be the November Quarterly Inflation Report which will see the release of updated economic projections. Persistently sub-target inflation as well as “gentle decelerations” in growth will make it difficult for the hawks to make a shift toward hiking rates until Q3 2016 at the earliest.

Despite the risk that inflation will remain below target there is the risk that BoE doves will talk themselves into being preemptive.

A rate hike from the Fed would make this task easier and while the risk is for a BoE rate hike to be pushed out into 2017 we will stick to our current call for liftoff to happen in Q3 2016.

Divyang Shah