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30 Jan 2015
BoE to start hiking in Feb 2016 - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank explained that disinflationary pressure has made itself very obvious in UK CPI inflation which dropped to just 0.5% y/y in December.
Key Quotes:
"The BoE is warning that CPI inflation could reach a trough of around zero in March but that there is a chance that it could dip below zero during the first half of the year."
"The money market has continued to push out expectations for the first BoE rate hike and is now not fully priced for the first interest rate hike until late spring. Economists’ surveys are less dovish and suggest that the BoE could be hiking rates in Q4 2015."
"In our view the BoE is likely to start hiking interest rates in February 2016. Although we see no need for the BoE to rush into a rate hike, assuming that oil prices stop falling at some point, the disinflationary impact of weak energy prices should be temporary."
"Cheap oil prices should lend support to domestic demand and to the medium-term inflation outlook."
Key Quotes:
"The BoE is warning that CPI inflation could reach a trough of around zero in March but that there is a chance that it could dip below zero during the first half of the year."
"The money market has continued to push out expectations for the first BoE rate hike and is now not fully priced for the first interest rate hike until late spring. Economists’ surveys are less dovish and suggest that the BoE could be hiking rates in Q4 2015."
"In our view the BoE is likely to start hiking interest rates in February 2016. Although we see no need for the BoE to rush into a rate hike, assuming that oil prices stop falling at some point, the disinflationary impact of weak energy prices should be temporary."
"Cheap oil prices should lend support to domestic demand and to the medium-term inflation outlook."