BoE likely to join Fed and ECB in keeping policy on hold in 2019, says Rabobank

The Bank of England (BoE) is expected to join the Federal Reserve and the European Central Bank (ECB) is keeping the monetary policy on hold throughout this year, according to a recent report from Rabobank.

Against the backdrop of intense political uncertainty regarding the UK’s withdrawal from the European Union, the Bank of England is trapped in a holding pattern.

MPC member Michael Saunders has indicated earlier in the year that he would like to see more clarity about Brexit before voting for a raise in rates, but the 6-month extension to Article 50 might be a little too much to ask.

In that case, the single dissent could also be interpreted as a signal that the MPC doesn’t permit Brexit to handicap its policy making. But even as the immediate risk of a no-deal Brexit has receded, we remain unconvinced.