Bank of England to hold fast
No change is expected this time around from the Bank of England (BoE), having undertaken to hike rates last month. The mantra from the BoE remains ‘limited’ and ‘gradual’ when it comes to rate rises, following the path set by the Federal Reserve (Fed).
Recent purchasing managers index (PMI) figures from the UK have been better for the construction and services sectors, but manufacturing remains under pressure. Wage data and gross domestic product (GDP) figures, however, have picked up, so it is not all doom and gloom where the UK economy is concerned.
But all this is a sideshow compared to Brexit. Until this uncertainty is removed the outlook remains clouded, and interest rates are likely to stay low, if not unchanged, as a result. With the outlook for monetary policy muted sterling’s main driver will be the Brexit headlines.