The big central banking event of next week is the Bank of England’s
May 10 meeting, with market expectations now overwhelmingly in favour of
interest rates being held at the current 0.5 percent rate.
Interest
rate bets have swung around sharply from early-April when investors
priced a 90 percent chance of the BoE raising rates by 25 basis points.
But a spate of weak economic data is almost certain to stay the BoE’s hand. Banks have slashed rate rise forecasts, with some not expecting one at all in 2018. That has taken sterling more than six percent lower in two weeks, tipping it into the red for 2018.
Investors will monitor Governor Mark Carney’s language for signals on what the appetite is for hikes further out in 2018. More dovish remarks from the BoE could send sterling even lower.
But a spate of weak economic data is almost certain to stay the BoE’s hand. Banks have slashed rate rise forecasts, with some not expecting one at all in 2018. That has taken sterling more than six percent lower in two weeks, tipping it into the red for 2018.
Investors will monitor Governor Mark Carney’s language for signals on what the appetite is for hikes further out in 2018. More dovish remarks from the BoE could send sterling even lower.
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