According to analysts at Westpac, the Bank of England’s August decision is looking finely balanced after it has previously signalled a gradual modest tightening will be required over the next few years.
Key Quotes
“And since their previous decision, we’ve seen the unemployment rate remain low and a number of indicators have pointed to a firming in growth through the middle part of the year.”
“However, the pace of growth remains muted. In addition, inflation has been easing back, with the core rate now down to 1.9%. On top of those factors, the political backdrop remains rocky, with Brexit casting a long shadow over the economy’s longer-term outlook.”
“Given the lingering downside risks, we expect that the Bank of England will keep the Bank Rate on hold at its August meeting, and that they will maintain a gradual tightening bias.”
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