Bank of England: Will interest rate cuts start in June or August?
2024-03-18
■ Although there is a high possibility that policy interest rates will remain unchanged at the meeting on March 21st, there is much concern about whether a more relaxed attitude is implied in the future.
■ With signs of changes in the UK employment situation, people are also paying attention to the impact of the February Consumer Price Index on the pound trend.
The unemployment rate for November 2023 to January 2024, announced by the Office for National Statistics (ONS) on March 12, was 3.9%, contrary to market expectations. The number of employed people decreased by 21000 compared to the previous period, and the salary growth rate (excluding bonuses, on a nominal basis) increased by 6.1% year-on-year. However, the growth rate slowed from June to August 2023 (a year-on-year increase of 7.9%) and reached a low level from August to October 2022. Although it is still too early to determine whether the pressure of labor supply and demand has eased, it is widely believed that the rise in labor costs has been somewhat controlled. In January, the actual gross domestic product (GDP) of the UK increased by 0.2% compared to the previous month, although it slightly rebounded, the pace of economic recovery is still weak. At the Monetary Policy Committee (MPC) meeting held on March 21, the Bank of England (BOE) stated that there is a high possibility of maintaining policy rates at 5.25%, and people will closely monitor whether the MPC will show a more relaxed attitude in the future, as well as the statement and meeting summary.
The Consumer Price Index (CPI) rose 4.0% year-on-year in January, while the core CPI increase rate, which excludes volatile items such as food, energy, alcohol and tobacco, also remained at 5.1% year-on-year. As prices of items with higher price stickiness continue to rise, the Bank of England said that further evidence is needed for interest rate cuts. At the MPC meeting on February 1, 6 of the 9 members supported maintaining the unchanged rate, 2 supported an interest rate increase of 0.25%, and 1 supported an interest rate cut of 0.25%. The February Consumer Reports were released the day before the meeting The price index (CPI) has attracted much attention. In the short-term financial market, more than 70% of expectations believe that the interest rate cuts will begin in August. However, as the employment situation changes, expectations of starting earlier in June have gradually increased to nearly 50%. With the US delaying interest rate hikes, people will also closely monitor the impact of the Bank of England's policy guidance on the current pound trend.
■ With signs of changes in the UK employment situation, people are also paying attention to the impact of the February Consumer Price Index on the pound trend.
The unemployment rate for November 2023 to January 2024, announced by the Office for National Statistics (ONS) on March 12, was 3.9%, contrary to market expectations. The number of employed people decreased by 21000 compared to the previous period, and the salary growth rate (excluding bonuses, on a nominal basis) increased by 6.1% year-on-year. However, the growth rate slowed from June to August 2023 (a year-on-year increase of 7.9%) and reached a low level from August to October 2022. Although it is still too early to determine whether the pressure of labor supply and demand has eased, it is widely believed that the rise in labor costs has been somewhat controlled. In January, the actual gross domestic product (GDP) of the UK increased by 0.2% compared to the previous month, although it slightly rebounded, the pace of economic recovery is still weak. At the Monetary Policy Committee (MPC) meeting held on March 21, the Bank of England (BOE) stated that there is a high possibility of maintaining policy rates at 5.25%, and people will closely monitor whether the MPC will show a more relaxed attitude in the future, as well as the statement and meeting summary.
The Consumer Price Index (CPI) rose 4.0% year-on-year in January, while the core CPI increase rate, which excludes volatile items such as food, energy, alcohol and tobacco, also remained at 5.1% year-on-year. As prices of items with higher price stickiness continue to rise, the Bank of England said that further evidence is needed for interest rate cuts. At the MPC meeting on February 1, 6 of the 9 members supported maintaining the unchanged rate, 2 supported an interest rate increase of 0.25%, and 1 supported an interest rate cut of 0.25%. The February Consumer Reports were released the day before the meeting The price index (CPI) has attracted much attention. In the short-term financial market, more than 70% of expectations believe that the interest rate cuts will begin in August. However, as the employment situation changes, expectations of starting earlier in June have gradually increased to nearly 50%. With the US delaying interest rate hikes, people will also closely monitor the impact of the Bank of England's policy guidance on the current pound trend.