Morgan Stanley: The Bank of England's policy wording may see a dovish adjustment

ChainCatcher news, Morgan Stanley expects the Bank of England to support keeping interest rates unchanged with a 6:3 voting ratio. However, the policy wording may see a dovish adjustment, hinting at possible action in November.

"Considering all the data since August and the scale of the current restrictions, we believe that the market pricing for a rate cut in September should be slightly higher. Nevertheless, we also think the likelihood of a rate cut will not exceed 30%." Morgan Stanley expects the scale of the Bank of England's QT next year to be £100 billion, up from a previous estimate of £90 billion, but still believes the risks are tilted to the downside. "November is a key meeting for the Bank of England this year, and we expect it to lay the groundwork for a faster pace of rate cuts, as the anti-inflation momentum in service prices is strengthening. We expect rate cuts in November and December, with the bank rate reaching 3.25% by August next year."