BoE ‘On Hold’ Until Early 2017 – Rabobank
Analyst at Rabobank Carlijn Prins believes the BoE could hike rates in February 2017.
Key Quotes
“BoE
Governor Carney recently admitted that Brexit was the greatest domestic
financial risk to the UK. The sharp drop in the value of the pound
during Q1 reflects the impact of the uncertainty”.
“While a
weaker pound may bring a benefit to exporters and push UK CPI inflation
back to the Bank’s 2% target a little quicker than estimated just a few
months ago, political uncertainty could also negatively impact
investment”.
“Additionally, it is impossible to predict with any
accuracy how a Brexit would impact the UK’s trading relations with the
EU and thus there is a wide margin for error in post Brexit growth
forecasts”.
“We expect the BoE will retain a cautious policy stance in the current environment and see no rate hike before February 2017”.
(Market News Provided by FXstreet)
