+357 25 030 930
Will the BOE hike rates?
Published on 24.10.2017 15:52

The British pound is under pressure in today’s trading after some analysts and a Bank of England board member threw into question the expected rate hike due out in the UK next week.

Comments from BoE Deputy Governor Sir Jon Cunliffe earlier today show the divide at the moment between BOE board members on the timing of an interest rate hike and as a result the pound was sold off.

‘I am not going to try and anticipate the November meeting, but for me the economy has clearly slowed this year” Mr Cunliffe said.

“Over the forecast period of three years interest rates will need to rise. The exact timing of when that starts? well, that for me is a more open question”. He added.

Some analysts also believe that the market is jumping the gun on the question of rate rises and that the pound has risen in recent weeks on such expectations. With the UK still without a Brexit deal among other things, it’s going to be difficult to justify a rate hike next week.

“Our highest conviction macro trade in recent weeks has been short GBP as we felt that UK rate hikes were overpriced given the weak starting point for UK growth and the existential Brexit shock that continues to dominate the medium-term outlook,” says Daniel Hui, a foreign exchange strategist at JPMorgan.

The material published in on this page is produced by the FIBO group companies, and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Andrew Masters

Analyst

The world of trading has no boundaries
×

Risk warning: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, your level of experience and preparation of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.

Important notice
By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.