GDP
We always expected the direction and size of the cut to come yesterday, after all, the market had it priced in by over 90% for two weeks ahead of the decision. But the statement was something of a surprise, with the Governor stating that the Bank of England was close to its neutral rate, which he estimated in the past to be in the 3%'s.
The Pound has managed to creep up against the Dollar and the Euro in the aftermath of the decision. I expected a bigger commitment to cuts next year, but with another vote share of 5-4, showing a large minority of MPC members still favouring higher rates, perhaps only 2 more cuts in this cycle is what is most likely. Good for the Pound perhaps, bad for the economy into next year.
This blog will be taking a break over the festive period, but will be back in the New Year. Until then, season’s greetings and best wishes for a happy and prosperous New Year from all us here at Caxton.
Markets Today
*Please be aware the below rates represent the market rate at 8:00 AM, contact your Caxton dealer or check online for a live quote.
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