A note from UBS previewing the BoE Monetary Policy Committee's (MPC) decision today, Thursday, 9 May 2024.
In brief:
- Bank of England to leave the Bank Rate unchanged at 5.25%
Focus likely to be on
1. any signals on the timing of the first rate cut
2. updated macroeconomic projections
The previous meeting in March signaled a dovish shift
- the two hawks (Haskel and Mann) switching from voting for a hike to keeping rates on hold
Data since that meeting:
- indicates further progress on disinflation,
- and also indicates wage growth moderation,
both broadly in line with the BoE forecasts
UBS on the likely distribution of votes:
- most of the MPC to vote to keep rates on hold
- Ramsden and Dhingra ito vopte for a 25bps rate cut
UBS expect the first cut from the BoE in August 2024, 25bp, but do say there is a risk of a June cut.
- projects 75bps of cuts in 2024, with -25bps in August, November and December
- projects 175bps of cuts in 2025
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The hiking cycle from the Bank of England:
