BoE's Cuncliffe suggests market pricing for 2019 rate hike unlikely
Bank of England deputy governor for financial stability Jon Cunliffe said market expectations of some for an interest rate hike in 2019 is not his central view.
Amid risks of a global economic slowdown some analysts have anticipated an increase in borrowing costs would not come for another three years and have seen a case for a rate cut.
“I can’t see anything in the economic news over the last three-to-four weeks that would lead to a shift like that,” Cunliffe said at an event in Brussels.
“My big picture of the world, I think, hasn’t changed with the market-yield curve. I think we are, particularly in the last couple of years, we are in the slow healing process from a financial bust.”
The pound strengthened 0.20% at $1.43 following his remarks.
Last month, BoE Governor Mark Carney said that interest rates are likely to remain at their historic lows for longer than expected due to prolonged low inflation and risks of a global economic slowdown.
"Due to the oil price collapse, inflation has fallen further and will likely remain very low for longer," Carney said.
The BoE’s Monetary Policy Committee expects inflation to return to the 2% target in about two years.