Candriam: Finely balanced’ BoE decision today, but expect cutting cycle starting in August

Candriam: Finely balanced’ BoE decision today, but expect cutting cycle starting in August

June 20, 2024

Interest Rates Monetary policy UK
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Jamie Niven, Senior Fixed Income Fund Manager at Candriam, comments on today's BoE's interest rate cut:

'Unsurprisingly given the lack of new forecasts or a press conference and the pausing of governor speeches in the run up to the UK general election, there was no change today by the BoE. However, the policy statement was somewhat dovish given the characterisation of today’s decision as ‘finely balanced’ by some members of the committee, which we believe likely includes Governor Bailey and other key internal MPC members, as well as no alarm at recent upside surprises on services inflation.

We continue to believe the BoE will embark on a cutting cycle starting in August and will cut more than the market is currently pricing, certainly relative to other key central banks. As such, being long on the UK rates market is one of our most favoured positions.'

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