BNY Mellon’s Newton: Commentaar Howard Cunningham op meeting Bank of England

BNY Mellon’s Newton: Commentaar Howard Cunningham op meeting Bank of England

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Howard Cunningham, Fixed Income Portfolio Manager at Newton Investment Management, his comments on the meeting of the Bank of England this Thursday.

‘This week the Bank of England will unveil its latest economic forecast and predictions in the newly named Monetary Policy Report. Despite the change of name investors do not expect to see any change to policy this week.

‘The UK market continues to be susceptible to UK politics and as such we would expect the central bank to cut growth and inflation forecasts in its Monetary Policy Report. Regardless of the forecasts in the next report, investors do not expect to see a change to interest rates until we receive some clarity on who will be running the country and their stance on Brexit.

‘This said, a poor economic forecast would put pressure on the central bank to introduce easing measures. The loss of momentum may even see previously hawkish members of the Bank of England’s Monetary Policy Committee acknowledge the need for a rate cut, although with just over a month until the next general election we would expect to see little change to policy this week.

‘With Mark Carney scheduled to leave the Bank of England at the end of January, a decision on the next Governor of the Bank of England could have been expected around now, but this has now been delayed until after the General Election.’