Search ForexCrunch

According to James Smith, Developed Markets Economist at ING, despite a fairly mixed run of UK’s economic data, the Bank remains relaxed about the first quarter slowdown and an August rate rise still looks more likely than not.

Key Quotes

“The key message from the Bank of England (BoE) today is that they’re comfortable things remain on track.”

“Importantly, the Bank remains just as confident that the economy is rebounding after the weak first quarter as it did back in May, pointing to the rebounding household activity as a key example.”

“Policymakers also remain upbeat about wage growth – a central part of the Bank’s thinking on rate hikes – suggesting that the recent moderation we’ve seen in average earnings hasn’t fazed the committee.”

“To us, this all suggests that an August rate hike is still more likely than not.”

“It’s also worth noting that one extra member – Chief Economist Andy Haldane – has joined two others in voting for an immediate rate hike.”

“But nothing is guaranteed – there’s still plenty of data to come between now and August.”