According to ChainCatcher, Morgan Stanley expects the Bank of England to keep interest rates unchanged with a 6:3 vote ratio. However, the policy wording may be adjusted to a dovish tone, suggesting that action may be taken in November.
"Taking into account all the data since August and the scale of existing restrictions, we believe that the market should price a slightly higher rate cut in September. But even so, we believe that the probability of a rate cut will not exceed 30%." Morgan Stanley expects the Bank of England's QT to be 100 billion pounds next year, compared with 90 billion previously, but still believes that risks tend to be lower. "November is a key meeting of the Bank of England this year, and we expect it to lay the foundation for a faster pace of rate cuts as the anti-inflation momentum of service prices is strengthening. We expect rate cuts in November and December, with the bank rate reaching 3.25% by August next year."
