Policy makers are expected to keep interest rates as 4.25%, as increasing geopolitical risks, permanent inflation and contradictory domestic economic data weight.
The Monetary Policy Committee (MPC) will announce its decision on Thursday and the markets will continue to continue the “gradual and careful” approach to facilitate politics. Since August 2024, Boe has reduced its rates fourfold due to stubborn inflation and flexible wage increase.
However, divisions have emerged within the committee. May’s meeting revealed a faster consensus, reducing the expectations of faster ratio cuts more quickly. A subsequent weak domestic data group revived speculation that MPC could slow down the rate of lowering borrowing costs.
“This Ayki Bank of England Policy Meeting [to leave rates unchanged] As he arrives, he said, Economist George Buckley said in Nomura.
“Until February next year, we continue to look for 3.5% terminal rates – so the monetary policy policy report meetings. We think that the settlement will be at the top of the neutral range. This is a faster cutting cycle faster than the market.”
Read more: Do the UK investment assets become more attractive? Your word
The Central Bank is faced with a complex global and domestic ground. Following the Israeli air strikes in Iran, rising oil prices (BZ = F) revived a wider fear of conflict in the Middle East, and united the volatility directed by US President Donald Trump’s changing trade policy.
Meanwhile, sterling (GBPUSD = X) has sharply strengthened the dollar and made the inflation appearance even more complex.
At home, the picture remains uncertain. The UK economy signed a 0.3% contract in April and reversed earlier growth. Wage growth slowed down until April in three months, and the unemployment rate rose further and asked questions about the underlying power of the labor market.
However, the inflation center continues to be an concern. Consumer price inflation was initially thought to increase to 3.5% in April. The National Statistics Office then revised the figure towards 3.4%, and after discovering, the Ministry of Transport was given false tax data.
Invetec Economist Ellie Henderson said, “Monetary policy seems in a good position, allowing the Bank of the UK to wait and see how economic conditions and international political grounds have developed.” “Ultimately, this is an extremely uncertain time that requires a potentially agile reaction from the central banks and limits a great prediction.”
The next data for May will be published on June 18 on the day when the bank started a two -day meeting.
Sarah Coles, Yahoo Finance’s personal finance columnist in the UK And if the personal finance president in Hargreaves Lansdown said, “If the inflation figures do not surprise any, interest rates are kept and we can see that the expectations for two deductions this year are better.”
Capital Economics’s British Chief Economist Paul Dales said that the shrinkage of april will not encourage the Bank of England to reduce interest rates next Thursday ”.
Deutsche Bank’s Chief Economist of England Sanjay Raj shared a view: “The Monetary Policy Committee (MPC) is expected to change the bank rate at 4.25% on June 19. However, increasing concerns about the labor market are expected to lead to domestic risks in June.
Read more: What should be watched this week: Inflation, UK Bank’s interest rates, account, Berkeley and Whitbread
The authority added: “This year, we increased the bank ratio to 3.25%for the three -quarter score deduction (August, November, December) and a final ratio deduction in February.”
Others are waiting for one summer move. Enrique Diaz-Alvarez, the chief economist of EBury, said: “Against this ground, the Bank of England is expected to keep the proportions constant this week, but since there is no strong inflation report, MPC may show that the next section may come in the summer months.
Ing analysts marked August as the next move. Uz We think that the latest disappointing business numbers help to strengthen an August rate deduction by preventing the big surprises in the data for the next month. At 4.25%, we expect abundant deduction and the terminal ratio to 3.25%to continue to reduce the bank ratio to 3.25%.
However, all market participants are not convinced that Threadneedle Street will move soon.
Read more: The UK economy decreased by 0.3% in April
Steve Matthews, the liquidity investment director of the Canada Life Asset Management, said, although the wider orbit for odds is down, the next road looks more shallow than before, ”he said. “Market pricing shows that the next movement is not possible before and after September. In addition, uncertainty around the US tariffs and trade policy creates a more cautious global ground – nobody wants to make an early move.”
In the face of the Atlantic, all eyes return to the US Federal Reserve, which is expected to change interest rates at the next week meeting. Investors will closely monitor the current economic projections, the latest signs of economic softness of the intensive policy makers and the ongoing trade uncertainty, unresolved financial negotiations and how much factoring in concerns about the increasing risk of conflict in the Middle East will seek clues.
The UK Bank will announce its last interest rate decision on Thursday, June 19 in the afternoon.
Read more:
Download Yahoo Finance App Apple And Android.
