What to expect from the BOE later and after today’s meeting decision?

December 19, 2024 at 10:14AM
On the bank rate vote, here’s what the calls are:

Barclays: 8-1 vote for a hold but minor possibility it could be as much as 6-3

BofA: 8-1 vote for a hold with risks for a 9-0

Deustche: 9-0 vote for a hold

Goldman Sachs: 8-1 vote for a hold

HSBC: 8-1 vote for a hold

JP Morgan: 8-1 vote for a hold

Morgan Stanley: 8-1 vote for a hold

Nomura: 8-1 vote for a hold

Besides Barclays’ outside call, there is more or less a general consensus expecting a 8-1 vote with Dhingra set to be the only policymaker to dissent in favour of a rate cut.

As for the central bank’s guidance, there is also a consensus is expecting the “gradual” approach to be maintained. In essence, the language will mostly be the same as per what we saw in November here.

But amid recent developments in the UK economy, the calls for next year are differing. While most are anticipating quarterly rate cuts at the moment, there are a few standouts.

Barclays is seeing that the BOE might have to readjust their pacing and “move to sequential 25bp moves in May, June, August and September, leaving the bank rate at
3.50%.. we think a majority of the committee will see this as consistent with policy being
neutral”.

Meanwhile, Deutsche sees the BOE taking it slow in the first half of next year before accelerating the pace in the second half of the year. The firm sees “three rate cuts in 2H 2025, taking
place in August, November and December.. The bank rate settling at 3.25% in Q1-26 –
broadly consistent with our view of medium-term r-star”.

As for HSBC, the firm sees rate cuts in February, May, August, September, November and December 2025
with a final cut to 3.00% in February 2026.

(h/t @ MNI – Market News)

This article was written by Justin Low at www.forexlive.com.