{"id":10466,"date":"2024-10-03T09:32:57","date_gmt":"2024-10-03T08:32:57","guid":{"rendered":"https:\/\/hamiltoncourtfx.com\/?p=10466"},"modified":"2024-10-03T09:42:07","modified_gmt":"2024-10-03T08:42:07","slug":"markets-react-to-baileys-dovish-comments","status":"publish","type":"post","link":"https:\/\/hamiltoncourtfx.com\/it\/markets-react-to-baileys-dovish-comments\/","title":{"rendered":"Markets React to Bailey\u2019s Dovish Comments"},"content":{"rendered":"
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Thought for Thursday<\/strong><\/h5>\n
\u201cEfficiency is doing things right. Effectiveness is doing the right things.\u201d \u2013 Peter Drucker<\/h5>\n<\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n
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Markets React to Bailey\u2019s Dovish Comments<\/h2>\n <\/div>\n
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The pound is under pressure this morning as markets react to dovish comments from the Bank of England\u2019s Governor, Andrew Bailey, voiced during an interview with The Guardian.<\/p>\n

As markets continue to speculate on the extent to which the BoE will cut rates over the coming months and quarters, Bailey hinted that the central bank could be a \u201cbit more aggressive\u201d in their monetary loosening. Such sentiments suggest a subtle change in rhetoric from his previous comments which said that Threadneedle Street would cut rates \u201cgradually\u201d. Markets are now fully pricing in a 25bps rate cut from the BoE at their next MPC meeting on 7 November, which would see its benchmark policy rate ease from 5% to 4.75%.<\/p>\n

Looking further down the line, markets are also implying that there is over a 60% chance of a further 25bps rate cut on 19 December (up from 47% at the start of this week), while around five 25bps cuts have been priced in between now and June 2025.<\/p>\n

This comes as headline inflation steadied at 2.2% over August, marginally above the rate seen during May and June but significantly lower than the start of the year when headline CPI stood at 4%.<\/p>\n

Speaking more generally on the health of the UK economy, Bailey said that \u201cI think the economy has come through the shocks of the last five years better than many of us feared\u201d. Though Bailey caveated this by warning that \u201cgeopolitical concerns are very serious\u201d<\/p>\n

On Monday, figures from the ONS indicated that UK GDP grew 0.5% on a quarterly basis over the second quarter of the year, coming in marginally softer than forecasts and marking a slight slowdown from Q1\u2019s print of 0.7%. Nevertheless, as we looked at on Monday, with this representing the second consecutive quarter of relatively robust growth, UK economic output now appears to have turned a corner from the stagnant growth seen over H2 2023.<\/p>\n

The latest data also indicates that the UK economy is now 2.9% larger than its pre-pandemic size, giving policy makers some modicum of comfort that growth is stabilising.<\/p>\n

Attention now turns to the next release of inflation figures on 16 October ahead of the BoE\u2019s monetary policy meeting on 7 November.<\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

Thought for Thursday, dovish comments from the Bank of England’s Governor.<\/p>","protected":false},"author":15,"featured_media":1788,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"rp-language":[16],"class_list":["post-10466","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-morning-updates","rp-language-en_gb"],"_links":{"self":[{"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/posts\/10466","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/comments?post=10466"}],"version-history":[{"count":12,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/posts\/10466\/revisions"}],"predecessor-version":[{"id":10478,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/posts\/10466\/revisions\/10478"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/media\/1788"}],"wp:attachment":[{"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/media?parent=10466"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/categories?post=10466"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/tags?post=10466"},{"taxonomy":"rp-language","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/it\/wp-json\/wp\/v2\/rp-language?post=10466"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}