Fidest – Agenzia giornalistica/press agency

Quotidiano di informazione – Anno 33 n° 348

The Bank of England (BOE) raising its benchmark interest rate to 0.5% for the first time in a decade

Posted by fidest press agency su venerdì, 3 novembre 2017

londonLondon. Julien Lafargue, European Equities Strategist di JP Morgan Private Bank writes about: “Today’s announcement is largely as expected. More interestingly it appears that the BoE is willing to proceed with very “limited” and “gradual” hikes. Yet, this message is likely to come across as slightly dovish as the market was already pricing in interest rates to be close to 1% by the end of 2020. We expect the BoE to remain prudent as the UK economy is still relatively fragile and the Brexit negotiations have made very little progress so far. In this context, at the equity market level, we maintain our preference for continental European vs. the UK where we prefer to focus on idiosyncratic opportunities at the stock level.” And Martin Arnold, Director – FX & Macro Strategist per ETF Securities writes: “The Bank of England (BOE ) has matched market expectations, raising its benchmark interest rate to 0.5% for the first time in a decade. The central bank has highlighted that although inflation will peak above 3.0% in October, but the path for rates will be ‘gently rising’, something that has weighed on Sterling.While the consensus expected a rate hike today, it wasn’t always the case. Until September, expectations for a rate hike this year had bounced between around 10% to 60%, and mostly toward the bottom end of that range.
A more hawkish tone from BOE Governor Carney in recent commentary, driven by ongoing inflation pressure and a resilient economic environment have been the reasons for our long held view that the BOE would hike rates in 2017. Although these elements also provided the basis for the BOE decision, the central bank was somewhat cautious regarding the uncertain impact of Brexit on the outlook for growth.

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