 Sterling fell sharply today after BoE Governor Andrew Bailey surprised markets by suggesting the possibility of aggressive rate cuts in an interview with The Guardian. Market expectations quickly adjusted, with swaps now fully pricing in a 25bps cut in November. The odds of a second 25bps cut in December also surged to 70%, up from 40% just a day earlier. However, it is crucial to note that while being the face of BoE, Bailey's comments reflect just his personal stance, and BoE’s MPC is known to be divided. The narrow 5-4 vote in favor of the 25bps rate cut back in August highlighted these internal divisions, and future decisions could be just as close. Greater clarity on BoE’s direction will emerge when other influential members of the MPC, such as Deputy Governor Dave Ramsden and Chief Economist Huw Pill, share their perspectives.... |
