BoE: No hike this month, August rate rise looks likely - ING

James Smith, Developed Markets Economist at ING, suggests that they think the Bank of England will err on the side of caution and keep rates unchanged when it meets on Thursday.

Key Quotes

“After all, a rate hike now could be one headwind too many for the faltering consumer-facing sectors.”

“But assuming the situation in retail doesn't get any worse between now and August, we think a rate hike over the summer still looks likely. With wage growth continuing to accelerate and global growth still (largely) heading in the right direction, we think policymakers are unlikely to have changed their minds when it comes to the prospect of further tightening. The Bank will also be conscious that Brexit noise could make it complicated to hike rates later in the autumn.”

“Markets are currently pricing a 50:50 chance of an August move, and there is a possibility that the Bank tries to subtly boost expectations. While we doubt we'll see any direct comments about the curve being too low this time, watch out for what the Bank has to say on growth, Brexit and wages, for signs that it is gearing up for further tightening in the months ahead.”