In a word. No
But, as we’ve been pointing out and Ryan did again this morning, that time is getting closer whether it be a wise move or not by the BOE
I’ve long stated that a hike in interest rates/series of hikes, however small, will have a big impact on household debt/expenditure and I stand by that view. Ok, so as with any hike in costs/taxes we get used to it and move on but this UK recovery is still fragile and I really don’t think Mr C is in any rush to test that out
Last night the FOMC surprised a few with comments that suggest a rate rise is not imminent, and they too are erring on the side of caution. It’s wise to do so in this current economic climate of uncertainty, both globally and at home.
So as each monthly meeting comes along so the speculation will increase. A rise in rates by Xmas ? No. End of Q1? Unlikely. Q2 sometime? More likely, and the governor has made it clear he will not be influenced by the UK elections in May next year. He will however have to take notice of his MPC hawks if they spread their wings and multiply. Are we likely to be surprised in the meantime? Quite possibly.
Delicately poised
In the comments section reader Nada told us “my dear, silly grandfather (he is over 90 years old, God bless him) told me this morning to expect a bombshell from BoE TODAY”. I’m a great preacher of the “expect the unexpected” mantra as regular readers will know. I just don’t see why we should get a hike today. But if we do GBP will take off and Nada’s grandad will be the well of knowledge/insight that we will all be queuing up to talk to! Bud Spencer was also earlier calling for 1.6400 today
I’m square on GBPUSD now after my recent short run down below 1.6000 but I’ll be looking to re-sell into 1.6250 and 1.6300. If the BOE does hike rates all bets are off but yes I’ll be selling again somewhere! As I said, rate hikes might please the yield-grabbers but beware the economic fall-out that follows.
