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Brexit is Still in BoE’s Way. US Jobs Report in Focus

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The Bank of England kept their interest the same, at 0.75%, as was widely expected. The only concern for them remains the Brexit uncertainty, which is holding them back from further rate increases. But putting that aside, investors will focus today on the US jobs numbers for the month of April. In addition to that, the Eurozone will release its preliminary inflation numbers. The US will show the figures of their Services PMIs for the month of April after the NFP release.

The BoE Sounded Somewhat Positive, But Brexit Is Still an Issue For Them

Yesterday, the Bank of England Monetary Policy Committee, in a unanimous vote, decided to keep the interest rate at 0.75%. It wasn’t a huge surprise for the market, as this is what traders were expecting to see anyway. All 9 members of the Committee were in favour of staying with same Bank rate, at least for now. But, once again, the BoE made it clear that their willingness to aim for a gradual rate rise in the near future is still on the table. The only issues, which are stopping the Bank from raising rates soon, is the slowdown in global growth and, of course, Brexit.

The later one (Brexit), was one of the main problems that concerns Mark Carney and his team right now. The uncertainty surrounding the UK’s withdrawal from the EU is not helping the BoE to work on their policy. Let us remind the reader that, initially, UK was supposed to leave the EU on March 29th, but because the Parliament could not agree on May’s deal, the EU decided to give UK an extension with a deadline on October 31st. The Bank said that the Brexit issue caused business investment to fall, as companies focus on shorter-term plans. According to Carney, he believes that such company concerns are justifiable and they have the full right to remain short-sighted for now. Also, businesses in the UK think that the Brexit uncertainty won’t be sorted any time soon.

GBP performance

But on a more positive note, the BoE stated that, overall, the UK economy seems to be...

Read the full financial markets daily report on JFD Research.

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Source: https://www.jfdbank.com/en/research/brexit-is-still-in-boes-way-us-jobs-report-in-focus
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