This (in brief) from ING rapid response to the UK election results, based on the exit polling:
- Election result gives green light to August rate cut
- Markets are pricing a 60% chance of an August rate cut, and we think that’s too low
- watch out for comments from BoE rate-setters next week, which might seek to boost expectations for an August cut
- Don’t forget that some policymakers thought the decision was finely balanced at the most recent June meeting, and the BoE has played down recent upside surprises to inflation
- We expect three rate cuts this year, starting in August
- Bank of England policy plans remain the most important domestic driver for the pound
- Our call remains for a move to 1.25 in Cable and to 0.86 in EUR/GBP on the back of Bank of England easing this summer
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Sterling update, barely moved:
The Bank of England next meet on August 1.
After that the balance of 2024 meetings:
- September 19
- November 7
- December 19
