Six managers on whether the Bank of England will hold or hike
By Kristen McGachey, 4 May 18
Weak Q1 GDP data and comments from Mark Carney have seemingly put the kibosh on a May rate hike, but the Bank of England’s trajectory is far from certain. Portfolio Adviser asked fixed income analysts and managers whether they think the BoE will begin tightening or hold off.
“Even as the economy emerged from winter’s icy clutches, the underlying macro data has failed to thaw as quickly as the committee had hoped, while slowing credit growth bodes ill for household spending. And closely-watched signals from the labour market are yet to show conclusively that upward pressure on wages is likely to pose an inflation threat.
“We have long feared that the already-embattled consumer will be put under further pressure by macro-prudential measures and the conclusion of the Term Funding Scheme. Against that backdrop, we don’t see need for the Bank to deliver further tightening through interest rates.”