BoE: No one expects a change in rates - BBH

The Bank of England's Monetary Policy Committee meets this week and no one expects a change in rates, suggests the analysis team a BBH.

Key Quotes

“Forbes, recently the lone dissent for an immediate rate hike will likely persist, but it is her last meeting.  The MPC is also short a Deputy Governor, making a 7-1 vote the most likely scenario. The electoral outcome may not be a direct economic factor or featured in the minutes.”

“Sterling's decline is not material.  It appreciated by nearly 1.6% against the dollar so far in Q2 and was up about the same in Q1.  The euro-sterling exchange rate has been in broad trading ranges since the second half of last November, roughly GBP0.8300-GBP0.8850.  It was at GBP0.8340 at the end of June 2016.  Sterling's decline was not capital flight in the face of political uncertainty. British bonds and stocks rallied.  Both the two and 10-year government yields eased 2.5 bp.  The FTSE 100 rallied (~1.0%) ostensibly aided by a weaker sterling, but the more domestic FTSE 350 advanced nearly as much (~0.9%).”