Analysts at Citigroup argue that the Bank of England (BOE) is likely to refrain from raising interest rates in the coming months amid looming no-deal Brexit risks, which is likely to keep the GBP undermined.
The BOE will announce its monetary policy decision on Thursday alongside the meeting’s minutes.
Key Quotes:
“The BOE raised GDP expectations across the forecast horizon earlier. A Brexit deal (or longer extension) is a likely precondition to any hike in 2019. However, the political backdrop remains the biggest risk to GBP
We no longer see a Bank Rate hike in August or indeed this year as likely, as no-deal could become a bigger risk quickly, with the dovish wind blowing through global monetary policy. This will likely be GBP-negative.”
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