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“We have changed our Bank of England view, and now no longer expect a rate hike in May,” Rabobank analysts wrote in a recently published report.

Key quotes

“The UK economy is holding up relatively well and domestic cost pressures are rising, even as it faces Brexit uncertainties and strong global headwinds. But as we’ve emphasised previously, the Bank’s ability to hike interest rates depends on what happens in Westminster. Unfortunately, that’s not much at all.”

“If these uncertainties re. Britain’s withdrawal eventually dissipate, as we still expect, the MPC may re-find the confidence to talk about rising rates in the second half of the year.”

“But with the risk of a US recession in 2020 then looking imminent and the Fed looking at rate cuts rather than hikes, the Bank is at serious risk of being stuck in the same boat as the ECB.  Our below-consensus and below-market view implies that the risks are to the upside.”