BoE: Evaluating options - Rabobank

Jane Foley, Senior FX Strategist at Rabobank, notes that at its last policy meeting just three weeks ago the MPC stated that “most members of the Committee expect monetary policy to be loosened in August”.

Key Quotes

“The remarks softened the market’s disappointment regarding the lack of fresh stimulus in July. The minutes of the meeting made clear that the MPC had discussed various easing options and the combinations thereof, although only Vlieghe voted in favour of an immediate rate cut.

We are expecting that this week the MPC will announce a 25 bp reduction in the Bank rate in addition to some form of targeted lending. We see this as most likely taking the form of a boost to the Bank’s Funding for Lending programme.”