The Bank of England (BoE) is set to cut interest rates by 25bps, and traders will ask why? Lower inflation is a blessing, but if officials worry about growth, the reaction in the Pound will likely be different. Live coverage.
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Bank of England Super Thursday is a multi-faceted event
The "Old Lady" as the Boe is also known, is set to reduce borrowing costs by 25bps to 4.50%. That is fully priced in.
Members of the Monetary Policy Committee (MPC) are projected to support the cut by a majority of seven vs. two who would back leaving rates unchanged. A larger majority would weaken the Pound, while a smaller one would support the Sterling.
Then, the focus shifts to what makes this Thursday "super." At this event, the BoE also publishes its quarterly Monetary Policy Report (MPR), which consists of critical forecasts. There is a fear that the bank would slash the growth outlook and lift inflation projections. Such a scenario of outright stagflation would hurt the Pound even if the BoE would refrain from further cuts in the near future.
A more optimistic scenario would include little changes to forecasts and confidence on the British economy.
Last but not least, BoE Governor Andrew Bailey faces the press, where reporters might badger him about US tariffs. He will try to avoid politics, but hints of how the BoE would respond to economic shocks coming from America might be useful if Trump focused his ire on the UK. He currently spares Britain, thanks to a lack of a large trade deficit.
All in all, it's a lively event, and we will cover it live for you.
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