‘The BoE meets at an interesting time. After an astonishing run stock markets finally hit the buffers earlier in the week as a dawning realisation broke that the unprecedented monetary accommodation from the world's central banks was not just nearing the end but might "normalise" more quickly than previous expected. Investors rushed for the exit not wanting to be left holding equities that were no longer buoyed by oceans of artificially cheap money.
‘In this environment Central Bankers will be cautious. Markets should experience volatility, it's not healthy otherwise, but there is no sense in stoking panic. Expect therefore a measured commentary from the BoE. Interest rates will be held for sure but it will be the tone of the accompanying statement that will be pored over for clues as to how quickly interest rates might move. In the UK with all the attendant challenges from Brexit and political uncertainty I'd expect a relatively dovish statement from Mark Carney. Rates in the UK will rise more slowly than in the US and, in all likelihood, to a lower level.
‘As St Augustine apparently said, “Oh Lord give me chastity, but do not give it yet."’