Tight BOE 5-4 Vote on Rate Cut Hinges on Bailey's Decision

31 Tem

Tight BOE 5-4 Vote on Rate Cut Hinges on Bailey's Decision

A Reuters survey indicates that most economists anticipate the Bank of England (BOE) reducing interest rates at its August meeting. The poll revealed that over 80% of respondents expect a rate cut.

We could see a close decision by the Monetary Policy Committee (MPC), with a 5-4 split in favor of a rate cut, leaving Governor Andrew Bailey to cast the deciding vote.

Market sentiment, however, remains more divided. Although, the investor outlook is gradually aligning with the expectation of a rate reduction with a slight majority predicting that rates will be cut.

Over in the US, the nonfarm payrolls report is forecasted to show a decline from 206,000 in June to 175,000 in July.

Contrary to this consensus, Bank of America economist Michael Gapen predicts a significant rise in nonfarm payrolls to 225,000 for July, the highest since March.

While the July jobs report may not drastically shift the Federal Reserve's policy direction, it will be pivotal in solidifying expectations for a rate cut in September.