BOE likely to keep rates on hold - Westpac

Analysts at Westpac expect the BOE will keep the Bank Rate on hold at 0.5% at its May meeting, and that they will maintain their gradual tightening bias.

Key Quotes

“The pace of activity has been easing off, including a step down in GDP growth to a lower than expected 1.2% in March (vs. 1.4% in December). Although some of this is due to earlier inclement weather, lingering uncertainty around the economic outlook and headwinds in the household sector are also a drag. Inflation remains above 2%, but has been easing back, and some further softening is expected over the coming months.”

“Reinforcing expectations for an on hold decision in May are recent comments from BOE Governor Carney. While he did note that rates are likely to rise over the coming years, he highlighted the continued uncertainty associated with Brexit and mixed tone of recent economic activity.”