"Inflation hasn't fallen in a way that allows policymakers to signal further cuts. The Committee will, we expect, hold the line to reinforce credibility. Markets should expect steady rates into the new year unless there's a decisive downward break in the data."
"The US and euro area can move toward looser policy because their price pressures have moderated more convincingly. The UK cannot follow without risking a resurgence in inflation expectations."
"If the Bank signals that rates stay high while the Federal Reserve and the ECB lean easier, the pound can grind higher against both the dollar and the euro. Volatility will stay elevated, but the underlying bias is toward strength."
The Bank of England is expected to keep its benchmark interest rate at 4% with slim odds of additional cuts before year-end. Headline consumer price growth remains at 3.8%, nearly double the 2% target, while core inflation has eased only marginally. Food costs are rising more than 5% year-on-year, increasing household budget pressure. Persistently high inflation constrains monetary easing and keeps policy deliberately restrictive despite slower global growth. The US and euro area can loosen policy more readily because their price pressures have moderated more convincingly. A higher-for-longer stance supports sterling and creates mixed implications across equity sectors.
Read at London Business News | Londonlovesbusiness.com
Unable to calculate read time
Collection
[
|
...
]