Bankinter: The Bank of England (BoE) has cut the Bank Rate by -25bp. to 5.0%, in line with expectations, but is sending a slightly hawkish message about further cuts.
Assessment: Both the statement and Bailey’s press conference are non-committal on future moves and reiterate the need to maintain a sufficiently tight monetary policy to ensure that inflation remains at the +2% target. This rules out that the central bank will continue to cut rates quickly and by too much. Even more so knowing that inflation is expected to pick up during the second half of the year (due to energy issues) from +2% in June and that both services and wage inflation are above +5.5%.
