BoE: No change in rates today – Rabobank

Rabobank analysts are expecting the BOE to leave the policy rate unchanged at 0.75%, which is also the consensus view and GBP OIS implies virtually no chance of a move in either direction at this week’s meeting.

Key Quotes

“Whilst the OIS market is--on balance--still looking for a rate cut in the first half of 2020, the implied probabilities have closely tracked those of a no-deal Brexit. The immediate threat of a no-deal Brexit has been averted, but uncertainty prevails.”

“The Christmas election, and even Johnson’s Brexit-deal, leaves open a wide range of future possible trading relationships, including no trade agreement at all. Business investment has been in the doldrums for almost two years, while cracks have also started to become visible in the labour market. There is a good chance that sustained weakness on this front tilts the balance within the MPC. Overall, we now expect two rate cuts in 2020.”