Bank of England is expected to make adjustments as economic headwinds gather on the horizon.
On eve of Brexit, there is a strong possibility that the Bank of England will later Thursday announce its first interest rate cut in more than three years, as economic headwinds gather on the horizon. Erlam said that, despite data pointing to a slight uplift for the UK economy late last year, the outlook was far from rosy.“If the government can do as they promise then the honeymoon can begin in 2021,” he said.
That would be the first reduction since August 2016 – when the BoE slashed rates to a record low 0.25% after the UK’s referendum vote in favour of leaving the EU. A key indicator for the health of the UK economy is the British pound, which has gained strength in recent months following heady losses in the wake of the 2016 Brexit referendum.Markets.com analyst Neil Wilson said that London-Brussels trade talks due to start on March 3 were “without doubt … the chief risk event for sterling and for UK equities going into the rest of 2020.”