Election result gives green light to August BoE rate cut – GBP to drift lower

July 04, 2024 at 11:57PM
This (in brief) from ING rapid response to the UK election results, based on the exit polling:

Election result gives green light to August rate cut

Markets are pricing a 60% chance of an August rate cut, and we think that’s too low

watch out for comments from BoE rate-setters next week, which might seek to boost expectations for an August cut

Don’t forget that some policymakers thought the decision was finely balanced at the most recent June meeting, and the BoE has played down recent upside surprises to inflation

We expect three rate cuts this year, starting in August

Bank of England policy plans remain the most important domestic driver for the pound

Our call remains for a move to 1.25 in Cable and to 0.86 in EUR/GBP on the back of Bank of England easing this summer

****

Sterling update, barely moved:

The Bank of England next meet on August 1.

After that the balance of 2024 meetings:

September 19

November 7

December 19

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

Election result gives green light to August BoE rate cut – GBP to drift lower