£ LIBOR spreads widening on Brexit/Global uncertainty
PegasusCapital - Thu 6th Dec
Within the November QIR the BOE had CPI at 2.18% at end Q1 2019 before the sharp fall in oil prices (they used $81 Brent as Q4 condition within the model, versus $63 spot!). By the spring of next year, if oil prices remain near current levels, we could be looking at an RPI yoy rate of nearer 2.7-2.8% at that time, some 90bp below current 5-year RPI rates.
PegasusCapital - Wed 21st Nov
The Bank of England has raised interest rates above 0.5% for the first time since March 2009, although this is still the first-time rates have been set at 0.75%, base rates were cut from 1% to 0.5% as part of the ongoing emergency response to the financial crisis. The 0.25% increase follows the removal in November of the emergency cut to 0.25% delivered in the aftermath of the Brexit vote.
PegasusCapital - Mon 6th Aug
The Bank of England left interest rates unchanged at its May meeting. Markets had largely written off any probability of an increase following the BOE Governor’s BBC interview in late April where he alluded to weaker Q1 growth and Brexit uncertainty delaying the prospect of higher interest rates. The inflation report itself provided very little in terms of guidance as to the timing of the next interest rate increase, forecast inflation was revised down slightly due to the lower than expected outturns since the last forecast round.
PegasusCapital - Mon 18th Jun
Economic Growth in the UK during Q1 has been quite disappointing, with the ONS advanced estimate showing activity barely changing in the first three months of the year relative to the end of 2017, with the ‘Beast from the East’ only partly to blame! Expectations for a 25bp interest rate increase in May reached a high of 90% in early April, but weaker than expected inflation reported for March, an unscheduled dovish interview with the BBC by BOE Governor Carney, and last week’s publication of the weak GDP data, pretty much ruled out the prospect of higher rates at the May meeting.
PegasusCapital - Tue 1st May