From the National Institute of Economic and Social Research
From the National Institute of Economic and Social Research (NIESR):
- The Bank of England should raise interest rates this week but also tell the public it will be ready to make a U-turn if Brexit talks sour or trade tensions with the United States escalate
- The BoE should raise rates, for only the second time since the global financial crisis, as even the modest economic growth ahead is likely to generate inflation
- We think the Bank should emphasise the uncertainty of the future path for the policy rate
- It is entirely possible that in three months' time, because of the Brexit negotiations, because of the trade wars or some other reason, the August rate increase could look like a mistake
- Holding off on a rate move now was not an option as the uncertainty was unlikely to lift
We know that markets are pricing in a near-90% chance of a quarter-point hike in rates. Yet with the move already so discounted, Cable hasn't bounced like maybe some expected it to:
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Thoughts:
- Higher time frame support held at least
- This short term retest continues to remain the level to manage risk around
