27 Feb 2015
BoE tightening expected in early 2016 – TDS
FXStreet (Edinburgh) - The Bank of England could start its hiking cycling in the first months of the next year, suggested strategists at TD Securities.
Key Quotes
“UK unemployment continues to fall while wage growth has finally started to pick up. However, with lower oil and food prices, CPI is set to fall further over the coming months”.
“We think there is a low probability of the BoE hiking with spot inflation so low and continue to expect the first hike in Feb 2016, especially as growth looks to have modestly decelerated and Greek worries once again lingering”.
“With uncertainty going into the upcoming election in May, market expectations of a first hike could be pushed further out, leading to opportunities to sell short sterling”.
“We expect the BoE to look through temporary weakness in inflation resulting from lower energy prices but tighter policy is unlikely until early 2016”.
Key Quotes
“UK unemployment continues to fall while wage growth has finally started to pick up. However, with lower oil and food prices, CPI is set to fall further over the coming months”.
“We think there is a low probability of the BoE hiking with spot inflation so low and continue to expect the first hike in Feb 2016, especially as growth looks to have modestly decelerated and Greek worries once again lingering”.
“With uncertainty going into the upcoming election in May, market expectations of a first hike could be pushed further out, leading to opportunities to sell short sterling”.
“We expect the BoE to look through temporary weakness in inflation resulting from lower energy prices but tighter policy is unlikely until early 2016”.