DAVY VIEW

As expected, the Bank of England’s Monetary Policy Committee (MPC) kept rates on hold yesterday (September 19th), with a slightly more dovish tone highlighting US/China trade tensions, weaker UK GDP growth and CPI inflation, and that a further delay to Brexit would depress economic activity due to prolonged uncertainty. Once again, the MPC warned that a ‘no-deal’ Brexit could even lead it to tighten policy, ignored by investors currently pricing in a 46% probability of a rate cut by June 2020.