abrdn: No BoE interest rate cut for the time being
abrdn: No BoE interest rate cut for the time being
Luke Bartholomew, Senior Economist at abrdn, comments on today's Bank of England meeting:
'No surprises today with the Bank of England, with interest rates kept on hold as many investors had expected. The Bank is weighing up the conflicting forces of a deteriorating growth environment with still elevated inflation. Keeping policy unchanged makes sense in that context, as the BoE tries to gauge the impact of its previous monetary tightening and the wider increase in global bond yields.
Bank communication suggests it is too early to be discussing interest rate cuts and that’s true for now. But we think the debate will increasingly move in that direction, with the most likely next move in interest rates down rather than up.
However, any cuts will probably have to wait until around the middle of next year, with inflation much lower partly due to the recession the economy seems to be heading into.
For now, UK bond yields will likely be buffeted by movements in the US bond market, which has been particularly volatile recently.'