BOE Rate Increase May Not Be Enough to Revive Brexit-Vexed Pound
- BOE expected to raise rates Thursday for first time since 2007
- Standard Bank prefers short-pound position into rates meeting
Panmure Gordon's French Says BOE Will Raise Rates
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The Bank of England may increase interest rates this week for the first time in more than a decade, but that won’t be enough to buoy the pound, according to strategists.
Markets almost fully price in a 25-basis-point increase in the BOE’s key rate on Thursday, meaning investors are ill-prepared for a disappointment. Should Governor Mark Carney and fellow policy makers keep policy on hold, or deliver a one-time hike that merely reverses the emergency cut after the Brexit vote, sterling could add to the last two weeks’ declines, according to Ross Walker, an economist at NatWest Markets.