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Bank of England: Now we expect the first hike in Q2 16 - Danske Bank

FXStreet (Córdoba) - Analysts from Danske Bank, after today’s meeting, expect that the Bank of England will raise the interest rate probably in May.

Key Quotes:

“As the hawkish BoE members have not been as hawkish as expected and since the oil price has lowered the inflation outlook, our call for a hike in Q1 16 has become very unlikely and thus we now expect the first BoE hike in Q2 16, probably in May 2016 in connection with the inflation Report (previously Q1 16, February 2016).”

“The lower oil price is the main reason why we now expect the first BoE hike in Q2 16, probably in May (previously Q1 16, February). The risk picture is in our view balanced with on the one hand growth above trend and the labour market more or less back to ‘normal’ and on the other hand an uncertain outlook for commodity prices.

“We expect the BoE to hike two times next year, taking the Bank Rate to 1.0% by the end of 2016.

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