Bank of England Takes Centre Stage
Good morning! Today, we see a return to the interest rates merry go round as the Bank of England announces its first decision of 2015. Of course, nothing is actually predicted to change but in a new twist, we no longer have to wait two weeks to find out what was discussed as the Monetary Policy Committee’s supporting policy statement will be released simultaneously.
It will be an interesting year for the Bank of England. What once appeared to be a 2 horse race between the UK and the US is now very much down to its last runner now as the US has left the UK standing. Where the US has speeded up and economic growth has accelerated healthily, the UK has stumbled along somewhat. The political backdrop of an impending election somewhat hinders any potential rate hike for the BoE as no one really knows what to expect. Markets hate the unknown more than anything and one can wildly speculate about what the future may hold for British politics but in reality no one has the answer. Even so, the statement will be minutely pored over, just in case there are any hints as to when we can expect a rate hike.
Amongst other news yesterday, the Federal Reserve released their latest minutes which showed that there will be no hike before April. Cheap oil prices and Dollar strength are likely to keep inflation below target for the foreseeable future, although the Fed doesn’t seem overly concerned about the current predicament.
Other than the glut of Bank of England data at midday, we have Eurozone retail sales, and US jobless claims.