BoE interest rate decision 2nd August

[247trader]

This is it. We’re looking at a near 80% odd expectation of a rate rise despite many thinking that it may not be the best course of action in the long run. 

What are people’s expectations of the August rate hike? Likely to happen for good reason, or really for the BoE MPC to save face? Continued slow rate rises are needed I’m sure... but doesthe data support it? 

Second rate rise in 10 odd years. One thing’s for sure the banks are going to make bank (pun intended) if this comes through. Could be worth getting on the sector ETFs and short term stock swings. Steeper futures curve, better profitability on consumer debt / mortgages etc, whilst not as much of a pay out on banking interest, and latency in clients switching to bigger and better bank accounts. 

So where do we think things are heading? 

Good ida for a rate rise? 

GBPUSD and EURGBP estimates? 

[Caseynotes]

Can the BoE normalise the economy (steady inflation and a healthy interest rate) before the next recession when it will need to lower interest rates? Certainly can't do that from here.

[JamesIG]

Interesting article and Bloomberg video here which goes some way to adding to both your thoughts. Discussion relating to the steepness of the futures curve, along with a requirement to stick to a policy for the sake of saving face. 

https://www.bloomberg.com/news/articles/2018-07-30/boe-rate-increase-looks-almost-certain-even-as-doubts-linger

[Caseynotes]

I would take Sentance over Blanchflower any day and the 'Carney face save' we have seen before when on nothing more than referendum 'fears' he lowered rates to 0.25% in Aug 2016, a mistake (imo) that he would not correct til late 2017. That's a whole year of a growing economy being stifled by ultra low rates. 

[JamesIG]

Expectations are starting to come in on this one. If anyone else sees others please feel free to post.  Useful to read through in detail so when the announcements are made you are in the best possible position. 

 

 

[Guest Charlie]

Thanks jamesig for that. The question I have is how much does the Fed decision have an impact on these things? Or is the decision basically known now basis UK Data? 

[trade247]