BoE: Carney won’t wait - TDS

Research Team at TDS, expects the Bank of England to cut Bank Rate 25bps on Thursday, with more easing ahead.

Key Quotes

“August’s meeting is the wildcard: we expect something but the breadth of options on the table is wide, and is likely to include new unconventional policies as well as a possible rate cut / further QE.

But we think QE can wait—for now. The Bank will launch QE once it’s had a chance to see more data and to more fully assess the hit to both supply and demand, and once a new government is in place.

A recession is likely to take hold of the UK in 16H2, and early estimates of monthly GDP suggest that 16Q3 could be in for a sharp fall—we currently estimate -0.2% q/q, but could see risks as severe as -1.0% q/q.”