Analysts at Rabobank offered their take on the upcoming Bank of England (BoE) meeting and expect the central bank to leave the policy rate unchanged at 0.75% on Thursday 19 September.
“This is also the consensus view and GBP OIS implies virtually no chance of a move in either direction at this week’s meeting.”
“Whilst the OIS market is –on balance– still looking for a rate cut in early-2020, the implied probabilities closely track those of a no-deal Brexit.”
“As such, the passage of a law that requires the Prime Minister to ask EU leaders for another 3-month delay if no deal has been reached has lowered the odds of a rate cut in the near term.”
“There will be no inflation report or news conference, but the minutes could potentially provide some indications about the MPC’s latest thinking on Brexit.”
“While we stick to our forecast for no changes in Bank rate in 2019 and 2020 on the premise that the UK will eventually leave the European Union with a deal in place, the risk of a no-deal Brexit remains a sword of Damocles hanging over the UK economy.”