Good morning, and welcome to our rolling protection of the world financial system, the monetary markets, the eurozone and enterprise.
The Financial institution of England is centre-stage right this moment, because it meets to set UK rates of interest and replace us on its view of the UK financial system.
It’s a 12 months for the reason that BoE raised borrowing prices for the primary time in a decade (from 0.25% to 0.5%), which was adopted by a second small enhance in August (to 0.75%).
The Metropolis doesn’t count on a hike right this moment, however we may get some agency hints about when borrowing prices return to the giddy heights of 1% or extra.
The Financial institution’s quarterly inflation report may even present if the Financial Coverage is extra optimistic about UK development prospects.
With wage development operating at a nine-year excessive of three.1%, and development holding up regardless of Brexit uncertainty, the Financial institution’s policymakers could also be getting twitchy. Does Britain really want such low borrowing prices, and weak financial savings charges, a decade after the monetary disaster?
“I believe there’s extra compelling proof of a brand new daybreak breaking for pay development, albeit with the sunshine filtering by means of solely slowly,”
After all, the Financial institution can’t actually contemplate elevating rate of interest till Britain’s exit from the EU is resolved. Yesterday, Brexit secretary Dominic Raab prompt a deal could be finished inside three weeks, solely to execute a dizzying and ungainly u-turn just a few hours later…
However nonetheless, Carney’s feedback may raise or sink sterling.
Hussein Sayed, Chief Market Strategist at FXTM, says:
Merchants’ consideration will flip to the Financial institution of England financial coverage determination right this moment which is predicted to maintain rates of interest on maintain.
Whereas Mark Carney’s speech and the Quarterly Inflation Report might transfer the Pound barely, it’s nonetheless all concerning the Brexit deal that may resolve the destiny of the foreign money.
We’ll uncover if the Brexit fog is chilling the financial system this morning, when knowledge agency Markit publishes its newest survey of manufacturing facility corporations.
The manufacturing PMI is predicted to fall to 53 from 53.8, which might present slowing development.
- 9.30am GMT: UK manufacturing report for October
- 12pm GMT: Financial institution of England rate of interest determination
- 12.30pm GMT: BoE governor Mark Carney’s press convention