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2 Mar 2015
BoE could hike rates in Q4 2015 – Rabobank
FXStreet (Edinburgh) - Jane Foley, Senior FX Strategist at Rabobank, points to the end of this year for the first rate hike by the ‘Old Lady’.
Key Quotes
“Relative to the very dovish position of market expectations, the February Inflation Report struck a hawkish tone”.
“That said, although Carney did cite that the next policy move was likely to be a hike, he was uncommitted stating that if there were signs that low inflation began to affect inflation expectations and wage growth the Bank “could adjust the pace and degree of Bank Rate increases, expand the Asset Purchase Facility, or cut Bank Rate further towards zero”.
“On the back of the Inflation Report, the market has moderated slightly its expectations for the timing of the first BoE rate cut, though market rates are still not fully priced for a tightening until spring 2016”.
“Surveys suggest that economists are again favouring a rate hike in Q4 2015”.
Key Quotes
“Relative to the very dovish position of market expectations, the February Inflation Report struck a hawkish tone”.
“That said, although Carney did cite that the next policy move was likely to be a hike, he was uncommitted stating that if there were signs that low inflation began to affect inflation expectations and wage growth the Bank “could adjust the pace and degree of Bank Rate increases, expand the Asset Purchase Facility, or cut Bank Rate further towards zero”.
“On the back of the Inflation Report, the market has moderated slightly its expectations for the timing of the first BoE rate cut, though market rates are still not fully priced for a tightening until spring 2016”.
“Surveys suggest that economists are again favouring a rate hike in Q4 2015”.