UK interest rate cut now looking likely

Hi everyone,

BoE member Michael Saunders, has today added more pressure on the Pound after acknowledging the UK may need to cut rates in 2 weeks' time. His speech comes after inflation figures for December were down more than expected. 

There is still a chance that the economy will show it has picked up recently after the majority win for Boris Johnson and this could yet see the bank choose to keep rates on hold. But, even with strong figures the damage could already have been done.

The meeting on the 30th will be Mark Carney's last as Governor and so the market will be watching closely for any last comments on the UK economy and his prediction for its future. With the election done and Brexit on a more settled course, the market should revert back to economic data taking centre stage, revealing a more calm market. 

In the meantime, as the list for an interest rate cut grows, Sterling will not be able to improve its position much (if at all) until we know the outcome at the end of the month. So if there are trades in the pipeline, it may be worth booking in before the meeting. 


 

 

 

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Dan Waterman
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