17 Mar 2016
BoE policy announcement is likely to see little new action - ING
James Knightley, Senior Economist at ING, suggests that the Bank of England policy announcement is likely to see little new action as policymakers seek to keep things stable ahead of June’s EU referendum.
Key Quotes
“Bank of England policy meeting is likely to be unremarkable. Officials have highlighted the uncertainty that the EU referendum is generating and the risk that this weighs on both sentiment and activity. Consequently, with inflation staying close to zero and wage pressures remaining benign there is no need for any form of action.
Indeed, if the UK was to vote to leave the EU in June we suspect that the Bank of England would look to cut interest rates, which is why the market curve is so flat given the closeness of opinion polls. As such, policymakers are likely going to try and create the most benign environment possible before 23 June with the fallout from the vote determining whether we see more stimulus or the reverse.”
Key Quotes
“Bank of England policy meeting is likely to be unremarkable. Officials have highlighted the uncertainty that the EU referendum is generating and the risk that this weighs on both sentiment and activity. Consequently, with inflation staying close to zero and wage pressures remaining benign there is no need for any form of action.
Indeed, if the UK was to vote to leave the EU in June we suspect that the Bank of England would look to cut interest rates, which is why the market curve is so flat given the closeness of opinion polls. As such, policymakers are likely going to try and create the most benign environment possible before 23 June with the fallout from the vote determining whether we see more stimulus or the reverse.”