Bank of England meet today. Bank rate to be left unchanged at 5.25% … what to focus on

A note from UBS previewing the BoE Monetary Policy Committee’s (MPC) decision today, Thursday, 9 May 2024.

In brief:

• Bank of England to leave the Bank Rate unchanged at 5.25%

Focus likely to be on

1. any signals on the timing of the first rate cut

2. updated macroeconomic projections

The previous meeting in March signaled a dovish shift

• the two hawks (Haskel and Mann) switching from voting for a hike to keeping rates on hold

Data since that meeting:

• indicates further progress on disinflation,
• and also indicates wage growth moderation,

both broadly in line with the BoE forecasts

UBS on the likely distribution of votes:

• most of the MPC to vote to keep rates on hold
• Ramsden and Dhingra ito vopte for a 25bps rate cut

UBS expect the first cut from the BoE in August 2024, 25bp, but do say there is a risk of a June cut.

• projects 75bps of cuts in 2024, with -25bps in August, November and December
• projects 175bps of cuts in 2025

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The hiking cycle from the Bank of England: