- BoE decision on interest rates. Actual: 5.25%. Expectations: 5.25%. Previously: 5.25%.
- Distribution of bankers' votes (hike-hold-lower). Actual: 0-7-2. Expectations: 0-8-1; Previously: 0-8-1.
The decision was received dovishly by the market, which is related to the details of the decision and the statement:
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app- Ramsden voted in favor of the cuts, as well as Dhindra
- Risks from inflation persistence are receding
- Inflation projections are lowered by BoE
We have an open door to an interest rate cut in June. It is worth mentioning that April inflation is likely to be on target, due to energy price cuts. The market is now pricing that the first cut could take place in June.
However, Governor Bailey said that the bank is not yet at the point to cut the base rate!
Key changes in economic forecasts:
- BoE estimates GDP +0.4% qq for q1 2024 (march forecast: +0.1%), sees +0.2% qq in q2 2024
- BoE forecasts GDP in 2024 +0.5% (feb: 0.25%), 2025 1% (feb: +0.75%), 2026 1.25% (feb: 1%)
- BoE forecasts unemployment rate in q4 2024 4.4% (feb: 4.6%); q4 2025 4.7% (feb: 4.9%); q4 2026 4.8% (feb: 5.0%)
- BoE estimates wage growth +5.25% yy in q4 2024 (feb: +4%), q4 2025 +2.25% (feb: +2.75%); q4 2026 1.5% (feb: +1.75%)
- BoE forecasts real post-tax household income in 2024 +1.75% (feb: +0.5%), 2025 +1% (feb: +0.25%), 2026 0.5% (feb: 0%)
Source: BoE
Source: xStation
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
