Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Refinitiv
Mar 22 - 12:55 AM

MUFG: We Maintain our Call for 100bps of Cuts this Year Following Today's BoE

By eFXdata  —  Mar 21 - 04:30 PM

Synopsis:

Following its recent meeting, the Bank of England (BoE) has maintained the Bank Rate at 5.25%, marking the fifth consecutive meeting without a policy rate adjustment. Despite indications that efforts to curb inflation are progressing, the BoE suggests that the appropriate conditions for easing monetary policy have yet to be met. A shift in voting patterns among members signals a growing openness towards rate cuts, potentially as early as June or August.

Key Points:

  • Unchanged Policy Rate: The BoE has decided to keep the policy rate steady at 5.25% during its latest meeting.
  • Inflation Reduction Efforts: The central bank acknowledges ongoing progress in controlling inflation, though not yet sufficient to warrant a shift towards easing monetary policy.
  • Voting Shifts: Changes in voting by members Jonathan Haskel and Catherine Mann, from advocating rate hikes to supporting a hold, hint at a growing consensus for potential rate cuts in the near future.
  • Projected Rate Cuts: MUFG maintains its forecast of 100 basis points in rate cuts for the year, with the timing of the initial cut—whether in June or August—still under debate.

Conclusion:

The Bank of England's recent meeting outcomes underscore a cautious approach towards adjusting monetary policy amid improving inflation metrics. The notable shift in voting behavior among the Monetary Policy Committee members reflects a gradual shift towards the possibility of rate cuts. Although the exact timing remains uncertain, MUFG anticipates a total of 100 basis points in rate reductions throughout the year, signaling a significant shift in the UK's monetary policy trajectory amidst ongoing economic assessments.

Source:
MUFG Research/Market Commentary

Subscription

  • eFXplus
  • End-user license agreement (EULA)

About

  • About
  • Contact Us

Legal

  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2024 eFXdata · All Rights Reserved
!