“All in all, high frequency data is starting to show the extent of the damage inflicted to the UK economy in the aftermath of the Brexit vote,” he continued. “We continue to believe a UK recession will be a near certainty, starting from late 2016 and taking hold in 2017. This view is driven mainly on the back of sharp reversal in business investment trends.”
Some investors are growing increasingly sceptical about whether heavily previewed monetary policy decisions can have much positive effect.
“A 25bps cut in the base rate will provide no more than a short-term sugar rush to the UK economy and the private sector will continue to be uncooperative,” added Christopher Metcalfe, investment leader, UK Equities at Newton Investment Management. “Price of credit for firms is already low and it is difficult to imagine if businesses are scared or unwilling to invest in the wake of Brexit at 50bp interest rates, whether a further to 25bp will induce them to invest.”
The stage is set for Carney once again, and it is going to be hard for him to impress an audience which seems to know his act inside out already.
