BoE preview: Despite elections, no change in monetary policy is seen – Wells Fargo

According to analysts from Wells Fargo, it is highly unlikely that the Bank of England will change its monetary policy in the near-term because of the election results. Next Thursday the BoE will announce its decision. 

Key Quotes: 

“The Bank of England (BoE) held rates for another month in May, voting 7-1 to leave its main policy rate steady at 0.25 percent, despite rising inflation in the United Kingdom. Yesterday, voters hit the polls for an early general election. Prime Minister May lost the Conservative parliamentary majority that she was hoping to keep, creating political uncertainty as the country begins to negotiate its Brexit terms. That said, we believe that it is highly unlikely that the BoE will change its monetary policy in the near term and expect for the bank to hold rates at 0.25 percent next week.”

“Other data on the docket for next week include retail sales, and producer and consumer price inflation. Consumer inflation has been running ahead of the BoE’s 2 percent target for the past three months and currently sits at 2.7 percent year over year. The bank also upwardly revised its inflation forecast to 2.8 percent this year from its previous forecast of 2.4 percent.”

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