The Bank of England will wait until August before raising interest rates, according to polls taken over the last few days.
We expected a rate rise this Thursday, but a massive turnaround after comments from BoE Governor Mark Carney, together with weak data suggesting Britain’s economy is barely growing.
At the start of April, they were pricing in a 90 percent chance of a hike, but that has plummeted to around 10 percent. Sterling has plunged from above $1.43 in mid-April to around $1.35 now.
Bank Rate will instead rise to 0.75 percent in August, medians in the poll said, and then to 1.0 percent in the second quarter of 2019, just after Britain is scheduled to leave the European Union.
We expect the data to improve in the coming months, allowing the Monetary Policy Committee to hike Bank Rate in August.
Tomorrow is a big day for Sterling, we have a mix of important economic data to be released from 9:30 in the morning. Speak to an analyst for more info on the impact we expect this to have on the pound. With lack of liquidity in the market coupled with inconsistent data releases, we expect the markets to be extremely volatile.