Analysts: Chances of May BOE rate rise now ‘close to zero’ - FT

The Financial Times (FT) is out with the analysts’ re-assessment of a May BOE rate hike chances, following the release of the UK first quarter GDP data.

Key Highlights:

A rate rise from the Bank of England at its monetary policy meeting in just under two weeks is now unlikely, according to analysts, after the UK reported its slowest economic growth in more than five years for the first quarter of 2018.

James Smith at ING noted:  “UK first-quarter growth was always going to be bad – but at just 0.1 per cent quarter-on-quarter, this is much worse than expected”.

Howard Archer, Chief Economic Adviser to the EY Item Club said that the GDP growth was “undeniably a worrying and disappointing performance. The extent of the slowdown suggests there may well have been a significant underlying loss of momentum in economic activity in addition to the weather impact”.

Mr. Archer thinks a June move more likely “as the economy shows improvement from the first quarter slowdown and the MPC looks to gradually normalize monetary policy”.