BoE: A 25 bps rate hike could trigger some initial disappointment and Pound selling – MUFG BOE GBPUSD InterestRate Banks
The main event today will be the BoE’s latest policy update. Economists at MUFG Bank analyze how GBP could react to the Interest Rate Decision.If the BoE raises rates by 25 bps as we expect then it will trigger some initial disappointment and Pound selling. The initial sell-off could be dampened by the BoE continuing to send a hawkish signal that it is prepared to hike rates further in response to fears over more persistent inflation in the UK.
At the same time, there is some speculation that the BoE will announce updated plans for quantitative tightening. The BoE halted reinvestments of its maturing gilts and has been actively selling gilts since September targeting a GBP80 billion annual reduction in their QE portfolio. The BoE is expected to announce a higher target for the next twelve months from October 2023 to September 2024 as more gilts totalling GBP50 billion are set to mature in the next twelve months.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
British Pound Toppish Ahead of BOE: GBP/USD, GBP/AUD, GBP/NZD Price SetupsThe chances of a smaller interest rate hike at the Bank of England’s (BOE) meeting on Thursday are growing as UK price pressures appear to be finally moderating from elevated levels. What is the outlook for GBP/USD, GBP/AUD, and GBP/NZD?
Read more »
Pound Sterling extends losses amid caution about pace of BoE’s interest-rate hikeThe Pound Sterling (GBP) continues its two-day losing spell as investors seem cautious ahead of the interest rate decision by the Bank of England (BoE
Read more »
MMA pound-for-pound rankings: Justin Gaethje head kicks his way into Top 10Justin Gaethje's head-kick knockout of Dustin Poirier on Saturday at the Delta Center in Salt Lake City, Utah, in the main event of UFC 291 was set-up beautifully, and gave 'The Highlight' what may well have been his most significant victory.
Read more »
A less hawkish outlook for RBA policy will put a modest dampener on AUD performance – MUFGThe Australian Dollar is the biggest mover following the RBA policy update. Economists at MUFG Bank analyze AUD outlook. RBA leaves rates on hold and
Read more »
Sweet spot for further USD weakness during H2 – MUFGThe US Dollar weakened further in July as it fell to fresh year-to-date lows. Economists at MUFG Bank analyze Greenback’s outlook. US Dollar to reboun
Read more »
Sterling falls to three-week low as traders await BoE decisionThe pound fell to a three-week low on Tuesday as investors digested economic data and looked towards an uncertain Bank of England interest rate decision on Thursday.
Read more »