As illustrated in the graph below, the BOE’s increasingly hawkish sentiment leading up to this week’s monetary policy meeting indicated policymakers’ positive view of the economy, giving Prattle full assurance that the bank would hold rates.
Due to concerns over Brexit in addition to generally weak economic activity, some sources expected the bank to discuss cutting interest rates.
In its official release, the bank did cut rate forecasts, stating that, “growth over the forecast horizon is expected to be slightly weaker than in the February projection,” while also clarifying that the new projection is contingent on market rates and “continued UK membership of the European Union.”
To conclude its announcement, the bank further warned that its forecast will be significantly affected by the outcome of the Brexit vote, stating that, “the most significant risks to the MPC’s forecast concern the referendum” and implying that a pass on the vote could lead to a recession for the English economy.
Leveraging our sentiment data, we’ll be sure to keep you up to date as this situation plays out.
The Prattle Team