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GBP: BoE tone likely to be more dovish with no surprises - MUFG

FXStreet (Delhi) – Lee Hardman, Currency Analyst at MUFG, expects the BoE to leave policy unchanged today with MPC member McCafferty maintaining his vote in favour of a rate hike.

Key Quotes

“However, the content of the accompanying policy minutes is likely to display a dovish tone reflecting recent heightened concern over slowing growth in emerging economies and disappointing surveys of business confidence in the UK.”

“The UK interest rate market and the pound have already adjusted to discount a more dovish outlook with the timing of the first expected rate hike pushed back until late 2016/early 2017.”

“It is not the turn of the year Governor Carney has been emphasizing as a point in time when the decision as to when to begin raising rates would come into greater focus. It will be more interesting to see if the minutes provide any signal regarding whether the MPC agree with the current more dovish market pricing, although the risk of the BoE trying to bring forward rate hike expectations at this juncture appears low.”

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