Commenting on the Bank of England’s decision to hold interest rates at 0.75%, Melanie Baker, senior economist at Royal London Asset Management, said:
“UK companies still face a significant amount of Brexit-related uncertainty which may weigh on confidence after the ‘Boris bounce’ and mean that the next policy change from the Bank of England is a cut, not a rate rise.
“Conditions for a near-term rate cut are updated; a rate cut may be needed if better survey indicators are not followed through by better activity data.
“Weak inflation seems to have increased as a concern, although their short term forecast indicates that they do not expect this to persist.
“They moved some way from indicating multiple rate rises in the future, by dropping language referring to ‘limited and gradual’, to simply referring to “some modest tightening of policy” perhaps being needed (if the economy evolves broadly as expected)”.
About Royal London Asset Management (RLAM):
Established in 1988, Royal London Asset Management (RLAM) is one of the UK's leading fund management companies, providing investment management solutions to both wholesale and institutional clients such as not-for-profit organisations, local authorities and the insurance sector.
RLAM manages £138.9 billion of assets and employs 104 investment professionals as at end March 2020. It invests in all major asset classes including UK and overseas equities, government bonds, investment grade and high yield corporate bonds, property and cash.
For professional clients only, not suitable for retail investors.
Issued by Royal London Asset Management Limited, registered in England and Wales number 2244297; authorised and regulated by the Financial Conduct Authority. Registered Office: 55 Gracechurch Street, London, EC3V 0RL.
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