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22 Apr 2015
BoE might hike this year despite low inflation – Danske
FXStreet (Barcelona) - Analyst at Danske Bank, Mikael Olai Milhøj, expects BoE to hike rates in November 2015 even if inflation remains low.
Key Quotes
“Last week we postponed our expectations for the first Bank Rate hike three months from August 2015 to November 2015. The main reasons behind our new call are that we have pushed our call for the first Fed hike to September, the appreciation of the GBP in recent months and hard data in Q1 disappointing so far.”
“We still believe that BoE will hike this year despite low inflation, as inflation is expected to pick up when the effect of the drop in food and energy prices starts to fade.”
“Another reason is that we expect wage growth to pick up further this year in step with the decline in labour market slack, however wage growth remains a downside risk to our call.”
Key Quotes
“Last week we postponed our expectations for the first Bank Rate hike three months from August 2015 to November 2015. The main reasons behind our new call are that we have pushed our call for the first Fed hike to September, the appreciation of the GBP in recent months and hard data in Q1 disappointing so far.”
“We still believe that BoE will hike this year despite low inflation, as inflation is expected to pick up when the effect of the drop in food and energy prices starts to fade.”
“Another reason is that we expect wage growth to pick up further this year in step with the decline in labour market slack, however wage growth remains a downside risk to our call.”