BOE Expected to Turn Even More Dovish Today, but the UK Manufacturing Report to Release First
Skerdian Meta • 1 min read
The usual meeting from the Bank of England (BOE) is scheduled to take place today. This is the first meeting after the election of the new Prime Minister Boris Johnson. In the lat meeting, the BOE recognized the increased weakness in the British economy, but they played both sides since Theresa May was leaving and hopes were that the new PM might bring something new to the table, which might restart the wheels of the Brexit debate.
But, BoJo is just playing the chicken game. He is threatening to leave without a deal on October 31, even though he would like one. But, the EU is not moving from the Irish border backstop which is the main issue here, as well as some other minor ones. This means that things are back where they were before Theresa May left.
Therefore, I expect the BOE to turn even more dovish today, given that hopes for a Brexit deal are slim to none now. The economic data has shown further deterioration this month, apart from earnings and inflation, so thee’s no reason for them to wait and see.
They should prepare markets for a date to start more monetary easing procedures, such as a rate cut probably. Although this morning, they will receive a last minute piece of information from the UK manufacturing report. This sector has fallen into contraction in the last two months and it is expected to go deeper today, so unless there is a miracle in manufacturing this month, this will be another sign for the BOE to turn dovish.