It is now being widely forecast that the Bank of England may cut interest rates sooner rather than later as the UK economy slows. What will be the likely impact on markets?
The Financial Times reported over the weekend (11th - 12th January 2020) that it had spoken to another member of the Bank of England Monetary Policy Committee who was prepared to vote for an interest rate cut if economic data does improve in UK after the Election.
The last time the MPC voted it was a ratio of 7 to 2 to keep rates at 0.75% pa.
One more = 6 to 3. Only 2 more needed to turn and it was only External Members rather than Bank of England/Government Staff that voted this way.
More rate cut stimulus = a weaker £ = stronger FTSE 100. Also, it will mean cheaper British Goods overseas.
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