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2025-12-18 16:54:37
[Bank of England Outlook: Weak Data May Trigger a Dovish Surprise] ⑴ The Bank of England is widely expected to cut interest rates by 25 basis points, bringing the benchmark rate down from 4.00% to 3.75%. The vote is expected to be 5-4 in favor of the rate cut, with Governor Bailey joining the dovish camp. ⑵ Market focus will be on the voting split and forward guidance. There will be no press conference at this meeting. ⑶ First, traders will pay attention to the voting split. A 6-3 vote in favor of the rate cut would be interpreted as more dovish than expected, potentially bringing forward expectations for the next rate cut, thus putting downward pressure on the pound and boosting the stock market. ⑷ On the other hand, if no rate cut is ultimately implemented, it will be seen as a hawkish surprise, potentially pushing the pound higher and putting pressure on the stock market. ⑸ Second, the guidance in the policy statement is expected to remain unchanged. The removal of the word "gradual" could be seen as a dovish surprise.
