FXStreet (Mumbai) – As per Danske Bank analyst, the Bank of England (BOE) will hike rates at the November meeting. The report says higher wage growth and MPC comments indicate the hike is ‘moving closer’.
Key Quotes
“Wage growth is at its highest level since February 2009 and the combination of increasing wage growth and very low inflation implies increasing real wage growth, which is at its highest level since September 2007.”
“Despite the higher unemployment rate and lower employment it is worth noting that the labour market is still more or less back to ‘normal’ as Bank of England estimates that the medium-term equilibrium unemployment rate is around 5.5%. In other words, the slack in the labour market has diminished of which the accelerating wage growth is also a sign.”
“We expect the Bank of England to hike rates in November this year as the medium-term inflation outlook still calls for tighter monetary policy.”
(Market News Provided by FXstreet)