25 Basis Point Rate Cut
1. Barclays: The Bank of England is expected to cut interest rates by 25 basis points. Traders have underestimated the likelihood of a rate cut, which is expected to pass by a 5-4 vote.
2. TD Securities: The Bank of England is expected to cut interest rates by 25 basis points. The bank may cite persistently high inflation as a reason for a more cautious stance on further easing than previously anticipated.
3. Nomura Securities: The Bank of England is expected to cut interest rates by 25 basis points. UK inflation in September was lower than expected. Service sector inflation remains high, but monthly growth momentum is slowing towards the inflation target.
4. Danske Bank: The Bank of England is expected to cut interest rates by 25 basis points. Since the last meeting, the labor market has continued to cool but not alarmingly. Weak inflation opens the door to further rate cuts.
Hold Rates Steady
1. Mitsubishi UFJ: The Bank of England is expected to keep interest rates unchanged, with a possible 6-3 vote, and one economist even supporting a 50 basis point cut; the next rate cut is expected in December.
2. Reuters Survey: The Bank of England is expected to keep interest rates unchanged, with 34 out of 63 economists believing the bank will hold rates steady this quarter, and 29 believing there will be one rate cut this quarter.
3. Pansen Macro: The Bank of England is expected to keep interest rates unchanged, with a possible 6-3 vote; as UK inflation appears to be slowing, the bank may also signal a rate cut in December.
4. Goldman Sachs: The Bank of England is expected to keep interest rates unchanged, with three more rate cuts next year. Market pricing reflects 1-4 rate cuts in the next 12 months, but a low probability of a deep rate cut.
5. Societe Generale: The Bank of England is expected to keep interest rates unchanged. Lower-than-expected UK inflation data in September, coupled with the Chancellor of the Exchequer's announcement of fiscal austerity measures, creates room for a rate cut in December.
6. Lloyds Bank: The Bank of England is expected to keep interest rates unchanged. Governor Bailey will cast the key vote, with a final decision of 5-4 to pause rate cuts. This would reflect the bank's tendency to suppress recent inflation expectations.
7. Oxford Economics: The Bank of England is expected to keep interest rates unchanged. Policymakers may want to see more sustained evidence that underlying inflationary pressures are weakening before deciding on further rate cuts.
8. Natixis: The Bank of England is expected to keep interest rates unchanged. Labor market conditions will increasingly attract the central bank's attention in the coming months, paving the way for further rate cuts. The bank plans to cut rates by 25 basis points in February next year.
9. ING: The Bank of England is expected to keep interest rates unchanged. The vote is expected to be a close one, with a 6-3 or 5-4 split. The four known hawkish members are likely to remain on hold, and Governor Bailey may be the deciding vote.
10. Berenberg Bank: The Bank of England is expected to keep interest rates unchanged, and it needs to wait for a clearer downward trend in service sector inflation before cutting rates again. Stubborn core and service sector inflation may prevent it from cutting rates again this year.
