Bank of England Interest Rate Decision: Analysts Predict No Change in Rates

The Bank of England meets today, Thursday, September 19, 2024.

Decision due at 1100 GMT

• 0700 US Eastern time

I posted a preview earlier here:

• BoA anticipate the Bank of England (BoE) will maintain Bank Rate at 5.0% at meeting today

TD is also tipping an on hold result:

• 7-2 vote expected

TD outline 3 scenarios, and nominate probabilities for each:

Base Case (70%, Hold, £100bn QT)

• The MPC votes 7-2 (+/- 1) to keep rates on hold at this meeting. Nothing changes materially enough in the Summary/Minutes to suggest a rate cut in November is off the table, but the MPC does continue to sound quite cautious around easing given strong wage growth and services inflation. QT is announced at another £100bn for the next year, unchanged from last year, but consisting of a much higher share of maturing debt, and lower active Gilt sales.

Hawkish (20%, Hold, Faster QT)

• As in the base case, the MPC votes decisively to hold rates, without ruling out further cuts. QT is more aggressive, maintaining another £50bn of active gilt sales over the next year, on top of the £87bn in maturing debt, making for a total of around £137bn in balance sheet reduction.

Dovish (10%, Hold, No Active Gilt Sales):

• The MPC leaves rates on hold in a close 5-4 vote, and ends active gilt sales, leaving QT at £87bn for the next 12 months. Importantly, the MPC notes that while it has left policy on hold, it explicitly says that it expects further reductions to Bank Rate in the future, leaving November firmly on the table, and implying that sequential cuts are possible from there.

This article was written by Eamonn Sheridan at www.forexlive.com.