There is a premium for patience – Rabobank

The Bank of England (BoE) left policy unchanged as expected at 5% in a split vote of 8-1, notes Stefan Koopman, senior macro strategist at Rabobank.

Another patient break in December

“As expected, Bank of England policy unchanged. In a split vote of 8 to 1, the MPC kept the bank rate at 5.00%. Only one external member Dhingra dissented.”

“The majority view is that more cuts are needed, but at a gradual pace, so as to ‘not cut interest rates too quickly or too much.’ MPC believes there is a premium on patience. We think a 25bp cut is likely in November before another patient break in December.”

“The MPC also voted on the pace of reduction in bullion stocks for the next 12 months. It continues to run at a rate of £100 billion a year. This was no surprise either. We don’t think this needs to be offset by lower policy rates.”