22 Jan 2015
BoE’s last bastion of sense crumbles – Nomura
FXStreet (Barcelona) - According to the Research Team at Nomura the unanimous vote in favour of keeping rates on hold has actually pushed the probability for a rate hike in 2015 minimal, further anticipating that BoE may now hike rates in February 2016.
Key Quotes
“The labour market report beat expectations, but while it may be a good day for data, we think it is a bad year for policy. The MPC is focussing firmly on spot inflation as the new worst thing, despite it being backward looking and heavily distorted by a one-off shock from oil prices.”
“For those of us that see rates as too low, worse news was the newly unanimous vote in favour of no change at the January meeting. The two members favouring hikes may see the decision as finely balanced, but the likelihood of that translating into actual hikes during 2015 has fallen.”
“As such, we have delayed our forecast for the first hike to February. That being the one in 2016, despite us seeing next month as a more appropriate February to begin for the UK economy.”
Key Quotes
“The labour market report beat expectations, but while it may be a good day for data, we think it is a bad year for policy. The MPC is focussing firmly on spot inflation as the new worst thing, despite it being backward looking and heavily distorted by a one-off shock from oil prices.”
“For those of us that see rates as too low, worse news was the newly unanimous vote in favour of no change at the January meeting. The two members favouring hikes may see the decision as finely balanced, but the likelihood of that translating into actual hikes during 2015 has fallen.”
“As such, we have delayed our forecast for the first hike to February. That being the one in 2016, despite us seeing next month as a more appropriate February to begin for the UK economy.”