2024-03-23 19:53:23
The UK economy is “moving in the right direction” for the Bank of England to cut interest rates, Governor Andrew Bailey said, after two members of the Monetary Policy Committee joined the camp of voting to ease the key rate. Reuters writes about this, Day.Az reports with reference to Gazeta.ru.
At Thursday’s meeting, 8 of 9 Committee members voted to keep the base rate at a 16-year high of 5.25%. However, two representatives who had previously advocated tightening policy this time abandoned calls for higher rates.
Most economists polled by Reuters expected at least one vote to raise rates further.
The Bank of England’s decision caused a sharp reaction in the markets. The pound sterling fell 0.4% against the dollar to $1.2730. The UK 2-year Treasury yield fell 11 basis points to 4.11% from 4.14% previously.
Interest rate contracts show traders are pricing in a 76% chance of a rate cut as early as June. At the same time, the FTSE 100 index rose, reaching an intraday high immediately after the announcement of the Bank of England decision.
“The rate hold and the arguments put forward by members of the Committee are not surprising. If the shift in the dynamics of positions within the committees reflects the overall situation, we still expect the Bank of England to start cutting rates in June,” commented Philip Shaw, chief economist at Investec in London. .
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