BoE interest rate decision comment: “This is quite the turnaround from where we were just weeks ago.”

by | May 10, 2018

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Aberdeen Standard Investments Investment Strategist Luke Bartholomew said: “This is quite the turnaround from where we were just weeks ago. Carney has always made clear that interest rate moves hinge on the data and the Bank clearly has concluded that the recent run of weak data can’t just be dismissed as a weather effect. Investors widely predicted that the Bank would step back from any move today. But the downgraded growth projections, and the stated desire to wait for additional information, suggest that we won’t get a hike any time soon either.

“Today will raise questions about the way the Bank’s guides markets about their thinking. It is yet more proof that we have to take that guidance with a pinch of salt. While the Bank has consistently argued that there is little further room for the economy to grow freely and wages to pick-up, when it’s come to it, they’ve baulked as the data dipped going into this meeting. With elevated uncertainty weighing on the economy, it seems the Bank is much more sensitive to new information, and less keen to look beyond what they claim is temporary weakness.”

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