BoE keeps rates on hold; is QE on the cards?

Added 14th July 2016

The Bank of England’s monetary policy committee (MPC) has surprised commentators by voting 8-1 to keep interest rates on hold at 0.5%.

BoE keeps rates on hold; is QE on the cards?

However, minutes from the MPC meeting suggest that most members believe a cut will happen in its next meeting in August.

As discussed earlier this week, markets had overwhelmingly priced in a high chance that rates would be cut.

The FTSE 100 had surprised many with its strong run post the EU referendum vote on 23 June.

However, this 11-month high is unlikely to last with the main index having dropped off significantly this afternoon on the Bank of England’s announcement.

“The market had treated a Bank of England base rate cut as a foregone conclusion, following the dovish commentary in the aftermath of the UK’s vote to leave the EU,” said David Katimbo-Mugwanya, fixed income fund manager at EdenTree Investment Management.  

“Inaction by the Bank of England at this juncture seems to imply it wishes to make a more detailed assessment of the potential shock to economic growth, ahead of announcing any policy measures to mitigate a slowdown.

“These may well include further quantitative easing as early as next month, when the Bank releases new growth and inflation forecasts in its Quarterly Inflation Report.”

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address

About Author

Gary Shepherd

Editor

Portfolio Adviser

Gary joined Last Word Media in 2009, becoming editor of Portfolio Adviser a year later. Previously, he worked at Incisive Media with roles across its Professional Adviser, Investment Week, Bloomberg Money and Mortgage Solutions titles. Gary has been shortlisted for various awards, winning Headline Money Investment Writer of the Year in 2010.

Features

US equities: If you can’t beat them, join them

US equities: If you can’t beat them, join them...

European investors have been dismissing US equities as too expensive for a couple of years. But as the S&P 500 continues to outperform other equity markets, appetite for the asset class is again on the...

Directories

Ashburton International
Ashburton International

Ashburton Investments is a new generation investment...

Tweets

Events

Future Advisory Forum Hong Kong 2016
Future Advisory Forum Hong Kong 2016

Tuesday 4th October 2016

Hong Kong

Future Advisory Forum Singapore 2016
Future Advisory Forum Singapore 2016

Thursday 6th October 2016

Singapore

Offshore Bond Workshop Manchester 2016
Offshore Bond Workshop Manchester 2016

12th October 2016
The Midland, Manchester

Future Advisory Forum Cape Town 2016
Future Advisory Forum Cape Town 2016

Tuesday 18th October
The Vineyard, Cape Town

Investment Strategy

Sponsored Content

OTHER STORIES FROM LAST WORD...