Ahead of the Bank of England next interest rate decision on Thursday 2 November, Steve Matthews at Canada Life Asset Management shares his expectations that the BoE will hold interest rates, with inflation remaining sticky, and UK PMI and employment data all indicating a slow economy.
Canada Life Asset Management’s Liquidity Fund Manager, Steve Matthews expects the Bank of England to hold its Base Rate at 5.25% on Thursday 2 November.
He said: “The Bank of England (BoE) is wary of potential bumps in the road. The key here is not only getting inflation down to 2%, but doing so in a stable and lasting way. With MPC member Mann saying she was still worried about persistent rises in the cost of living and with CPI holding steady in the last print, there are no guarantees that the hiking is over.
“However, UK Manufacturing PMI and employment data indicate a generally weakening economy and, as such, we expect the BoE to judge this as a precursor to inflation falling as previous hikes take hold. Naturally, as we perceive rates to peak, the market looks to when the first cuts may take place. We feel it’s too early to say that the work to control inflation is done and see rates remaining at 5.25% for much of 2024.”
