BoE More Likely to Hike Than Cut Next

For most economists, the Bank of England’s move to a neutral stance presages an eventual increase in interest rates.

Almost two-thirds of analysts surveyed by Bloomberg see the Bank of England raising its benchmark from a record low as policy makers confront inflation that could exceed their 2 percent target as soon as the second quarter of next year. Consumer-price growth was probably 1.1 percent in November, the fastest in two years.

The BOE’s neutral stance is a consequence of the opposing tensions created by June’s Brexit vote. Governor Mark Carney and his colleagues are set to provide fresh insight into how they intend to balance supporting growth and controlling inflation — pushed up by the pound’s decline — on Thursday, when they publish their latest policy decision.

Bloomberg

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.