Aberdeen: Consensus at the BoE
Luke Bartholomew, Deputy Chief Economist at Aberdeen, comments on today’s Bank of England interest rate decision:
'Once upon a time, a cut at today’s meeting had looked like a sure thing. But given the Iran conflict, it is no surprise that the Bank of England decided to keep policy on hold today.
What is striking is that all policymakers voted to keep policy on hold, which shows that even the more dovish members of the committee want to see how this conflict plays out before cutting again.
With today’s labour market data showing wage growth is continuing to moderate, there is certainly a strong case for bringing rates down eventually. But with the inflation outlook now looking more challenging, the Bank will be focused on keeping inflation expectations pinned down.
So while the hurdle to a return to rate hikes is very high, the economy could be facing a long wait until the next cut.'
