BoE: Base case is for a dovish market outcome - TDS

Research Team at TDS, notes that the UK MPC releases its long-awaited post-Brexit decision today.

Key Quotes

“All options are on the table, but ultimately we expect a 25bps cut to Bank Rate, £50bn of QE purchases, and an improved FLS program. While we still haven’t had any hard data to support the sharp downgrade to growth forecasts that we’re looking for, but we think that the risks to the economy of delivering too much stimulus are far smaller than the risks of delivering insufficient or overly delayed stimulus.

Our base case is for a dovish market outcome, but we can also envision a number of different ways in which the BoE could disappoint with insufficient easing. This leaves the probability-weighted market outcome for both rates markets and the currency as a much closer call.”