Bank of England meets today, Thursday, September 19, 2024:
- 1100 GMT is 0700 US Eastern time
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The below is the eFX summary of a note via Bank of America on the Bank of England and GBP
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Synopsis: BofA anticipates that the Bank of England (BoE) will maintain the Bank Rate at 5.0% during its upcoming meeting, with potential for a more dovish voting pattern.
Key Points:
1. Rate Decision: • BofA expects a 7-2 vote to keep the Bank Rate unchanged at 5.0%, with risks leaning towards a more dovish 6-3 outcome.
2. Guidance and Approach: • The BoE is likely to reiterate its meeting-by-meeting approach to monetary policy, maintaining current guidance.
3. Quantitative Tightening (QT): • An announcement regarding the Gilt stock reduction target, projected at £100bn for the upcoming year, is anticipated. The Gilt sales schedule for 4Q24 will also be outlined.
4. Market Implications: • The decisions on Gilt supply will impact debt definition, Gilt liquidity, and the relative scarcity of low coupon Gilts.
5. GBP Outlook: • The GBP is benefiting from expectations of higher for longer rates and a structural reset post-election. Despite positioning risks associated with a closer voting pattern, BofA believes the GBP is well-positioned to handle cyclical risks.
Conclusion: BofA’s outlook suggests a stable path for the BoE, with the GBP likely to strengthen amidst ongoing high interest rate expectations and strategic monetary policy adjustments.
This article was written by Eamonn Sheridan at www.forexlive.com. Source