Bank of England to trim Bank Rate on Aug 1 and once more this year, economists say
reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?RIC=GBBOEI%3DECI BoE poll data
reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=GBGDPQP economic poll data
By Jonathan Cable
LONDON, July 24 (Reuters) -The Bank of England will trim Bank Rate to 5% next week, a majority of economists said in a Reuters poll, and with inflation expected to hover around target, it will embark on a slow and steady reduction path with one more cut this year.
However, markets are only pricing in around a 45% chance of a cut and several economists declined to say whether the first cut would come in August or September. #BOEWATCH
Bank Rate has been at a 16-year high of 5.25% since last August. The BoE was one of the first central banks to start raising borrowing costs after the COVID-19 pandemic and, like its peers, is now looking at easing policy.
Over 80% of economists, 49 of 60, in the July 18-24 poll said the Bank would cut to 5% on Aug. 1. However, a similar sample of respondents in a June poll were more convinced of a move next week, with 97% predicting it then.
The Bank will publish its quarterly Monetary Policy Report alongside the rate announcement next week and hold a press conference.
"We look for a 25 basis point rate cut at next week's meeting, although the call appears much closer than it did several weeks back. The case for lower rates is far from clear," noted Allan Monks at J.P. Morgan.
"If rates are lowered in August, it looks likely to happen on a close 5-4 vote."
In June, the rate-setting Monetary Policy Committee voted 7-2 to leave Bank Rate on hold but some members said their thinking was now "finely balanced".
An August cut would put the BoE ahead of the U.S. Federal Reserve, which is expected to wait until September, but behind the European Central Bank which made its first cut in June and although it paused this month, it said September was "wide open".
British inflation held at 2% in June - the Bank's target - but defied forecasts for a slight fall, and while wages grew a bit more slowly, they still increased at a pace normally too strong for the Bank, and markets reduced bets on an August move.
Wages rose 5.7% in the three months to May from a year ago, close to double the rate that would be consistent with the BoE's 2% inflation target.
Still, inflation was expected to be relatively benign and close to target through 2025.
PAUSE FOR BREATH
Following August's trim, the Bank will pause in September before cutting 25 basis points in November to put Bank Rate at 4.75%, median forecasts showed. It will take another breather in December.
Asked what was more likely regarding their end-2024 forecasts, 77% of respondents, or 17 of 22, to an extra question said that Bank Rate would be higher than they expect.
It will be a similar slow and steady pace next year with 25 basis point cuts in the first and second quarters, 50 in the third and 25 in the fourth, to put Bank Rate at 3.50% by end-2025.
"A 25 basis points rate cut a quarter, basically. A very gradual path towards where we think the terminal and the neutral rate is, which is just around 3%," said Sanjay Raja at Deutsche Bank.
"We get there in summertime 2026, so it's a very protracted rate-cutting cycle towards neutral policy."
The path for growth will also be steady - the economy was predicted to expand 0.3% each quarter through to the end of 2025.
Across this year, GDP growth will pick up 0.8% before an acceleration to 1.3% next year, a touch faster than expected in June.
(Other stories from the Reuters global economic poll)
Reporting by Jonathan Cable; additional reporting by Hari Kishan; polling by Sarupya Ganguly; Editing by Bernadette Baum
Asset collegati
Ultime news
Disclaimer: le entità di XM Group forniscono servizi di sola esecuzione e accesso al nostro servizio di trading online, che permette all'individuo di visualizzare e/o utilizzare i contenuti disponibili sul sito o attraverso di esso; non ha il proposito di modificare o espandere le proprie funzioni, né le modifica o espande. L'accesso e l'utilizzo sono sempre soggetti a: (i) Termini e condizioni; (ii) Avvertenza sui rischi e (iii) Disclaimer completo. Tali contenuti sono perciò forniti a scopo puramente informativo. Nello specifico, ti preghiamo di considerare che i contenuti del nostro servizio di trading online non rappresentano un sollecito né un'offerta ad operare sui mercati finanziari. Il trading su qualsiasi mercato finanziario comporta un notevole livello di rischio per il tuo capitale.
Tutto il materiale pubblicato sul nostro servizio di trading online è unicamente a scopo educativo e informativo, e non contiene (e non dovrebbe essere considerato come contenente) consigli e raccomandazioni di carattere finanziario, di trading o fiscale, né informazioni riguardanti i nostri prezzi di trading, offerte o solleciti riguardanti transazioni che possano coinvolgere strumenti finanziari, oppure promozioni finanziarie da te non richieste.
Tutti i contenuti di terze parti, oltre ai contenuti offerti da XM, siano essi opinioni, news, ricerca, analisi, prezzi, altre informazioni o link a siti di terzi presenti su questo sito, sono forniti "così com'è", e vanno considerati come commenti generali sui mercati; per questo motivo, non possono essere visti come consigli di investimento. Dato che tutti i contenuti sono intesi come ricerche di investimento, devi considerare e accettare che non sono stati preparati né creati seguendo i requisiti normativi pensati per promuovere l'indipendenza delle ricerche di investimento; per questo motivo, questi contenuti devono essere considerati come comunicazioni di marketing in base alle leggi e normative vigenti. Assicurati di avere letto e compreso pienamente la nostra Notifica sulla ricerca di investimento non indipendente e la nostra Informativa sul rischio riguardante le informazioni sopra citate; tali documenti sono consultabili qui.
