The Bank of England is about to sit and decide on monetary stance for July – a first month after Brexit vote. Some expect a rate cut, given the plunge in some of the equity markets, and economic uncertainty.
The thing is that the Bank of England has already eased monetary measures notably in recent days. One of those measures have been a pre-EU referendum announcement of injecting billions in additional sterling volumes into the financial system to offset possible shocks. These additional operations have been scheduled to come along the regular Indexed Long-Term Repo (ILTR) operations.
On Monday, July 11, we learnt Theresa May, a ‘Bremain’ candidate, has turned out to be the only contestant for the next prime minister, and the key figure to negotiate UK’s post-Brexit status quo. With the political uncertainty diminishing somewhat, we may anticipate BoE sits tight on rates this month, and waits for the fresh forecast due in August, before deciding on further steps in September at the earliest.