Barclays on the Bank of England decision
- The MPC is leaning more to the dovish side after some MPC members surprised with hawkish statements previously
- The new BOE view is "much more in line" with the data
- The new BOE tone reduces the risk of an early rate hike
- The downgrade in growth forecast to 1.7% from 1.9% likely reflects more caution, especially on investment
- The rhetoric about future rate hike was largely unchanged
ING:
- The BOE is still very optimistic on wage growth despite the lower forecasts
- See 3% wage growth forecast as too high, think it will stay at or below 2%
- The BOE expects low interest rates and high profits to lift investment, even as firms compete with Brexit uncertainties... that's a big question.
- ING believes companies will be more cautious
- "We think the MPC as a whole will continue to look through the latest price spikes and focus more heavily on the weaker growth outlook."
- They don't think the BOE will follow through with hikes, more more likely it's a "one or two and done"
Scotiabank economist Alan Clark
- "The most striking thing is that they have downgraded the outlook for wages despite lower-than-expected unemployment, and the inflation profile is a bit lower, despite a weaker pound."
