According to analysts from TD Securities today’s decision and documents from the
Bank of England support the view of a rate hike at the May 2016 meeting.
Key Quotes:
“On the surface, the accompanying minutes and Inflation Report paint a dovish picture, with lower growth and inflation forecasts in the near-term, and risks tilted to the downside.”
“We remain comfortable with our call for a May 2016 hike. As we largely expected, the Bank of England’s November Inflation Report and minutes showed dovish revisions to the near-term growth and inflation outlooks, but hawkish signs buried deeper in the report make us comfortable maintaining our view of a rate hike in May 2016.”
“Overall, the tone of the report was relatively in line our view, painting a softer picture of the economy in the near-term. The lower 2016 forecasts were partly offset by repeated messaging that yields are too low for the MPC’s comfort, and we interpret this as the Bank of England wanting to keep a 2016Q2/Q3 rate hike on the table.”
Key Quotes:
“On the surface, the accompanying minutes and Inflation Report paint a dovish picture, with lower growth and inflation forecasts in the near-term, and risks tilted to the downside.”
“We remain comfortable with our call for a May 2016 hike. As we largely expected, the Bank of England’s November Inflation Report and minutes showed dovish revisions to the near-term growth and inflation outlooks, but hawkish signs buried deeper in the report make us comfortable maintaining our view of a rate hike in May 2016.”
“Overall, the tone of the report was relatively in line our view, painting a softer picture of the economy in the near-term. The lower 2016 forecasts were partly offset by repeated messaging that yields are too low for the MPC’s comfort, and we interpret this as the Bank of England wanting to keep a 2016Q2/Q3 rate hike on the table.”
