Despite the increased call for a rate cut by the Bank of England (BOE) policymakers recently, a Reuters poll of analysts showed that the British central bank is likely to steer rates on a steady course on January, 30th – the eve of the UK’s departure from the European Union (EU).
Key Findings:
“While 60 of 68 respondents in the Jan. 13-16 poll said there would be no change in policy this month they gave a median 35% chance the MPC will cut rates.
Sterling fell 0.25% against the dollar after the inflation data and money markets now see around a 57% chance of a rate cut this month compared to 49% before the inflation reading. But median forecasts in the poll of over 60 economists show no change to borrowing costs until 2023 at least.
The median probability of a disorderly Brexit, when no deal on their future relationship is agreed between the two sides, nudged up to 20% in the latest Reuters poll from 15% given last month.
The economy will expand just 1.1% this year but accelerate to 1.5% next year after the situation is clarified, the median of nearly 90 economists polled showed.
There is just a 20% likelihood of a recession this year and a 25% likelihood of one in the next two years, down from the 25% and 30% chances given in a December poll.”
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