1 Oct 2015
BoE policy meeting preview - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank explained that the minutes of the September MPC meeting confirmed that developments in China and their effects on international financial markets were the main focus of last month’s policy discussions.
Key Quotes:
"The slowdown in growth in China and many emerging market economies combined with an increase in market volatility has drawn a cloud over the outlook for BoE policy. In recent weeks a softer tone in UK manufacturing data has also been continued; this being associated with GBP strength.
While surprisingly healthy average earnings figures suggest there is still scope for a sturdy rebound in domestically generated inflation, the better tone of these data may be a lagged response to growth in employment that has now slowed.
Given the continued weakness in commodity prices and with UK CPI inflation back at zero y/y in August, there would appear to be little reason for the BoE to rush into a rate hike. Consequently, we have moved back our forecast for the first move of the cycle to August 2016 from May 2016."
Key Quotes:
"The slowdown in growth in China and many emerging market economies combined with an increase in market volatility has drawn a cloud over the outlook for BoE policy. In recent weeks a softer tone in UK manufacturing data has also been continued; this being associated with GBP strength.
While surprisingly healthy average earnings figures suggest there is still scope for a sturdy rebound in domestically generated inflation, the better tone of these data may be a lagged response to growth in employment that has now slowed.
Given the continued weakness in commodity prices and with UK CPI inflation back at zero y/y in August, there would appear to be little reason for the BoE to rush into a rate hike. Consequently, we have moved back our forecast for the first move of the cycle to August 2016 from May 2016."