Report
Philip Rush
EUR 58.63 For Business Accounts Only

BoE: still hawkish in smooth Brexit scenario

- The MPC was unanimous in leaving policy unchanged again in Aug-19, as expected.
- Further monetary stimulus from markets pricing risk of no-deal provided a significant increase in forecast excesses. Adjusting for the effect of a smooth deal on market prices leads the MPC to still signal rate hikes as appropriate.
- Policy changes in a no-deal scenario will depend on the specific balance of shocks, so the Bank still describes its response as not automatic. I maintain my baseline forecast for a 50bp rate cut in Jan-20 following a no-deal Brexit.
Provider
Heteronomics
Heteronomics

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Analysts
Philip Rush

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