A Bank Of England Hold Tomorrow Could Backfire Badly
The warning from Nigel Green comes as latest data reveals that UK inflation jumped to 3.1% in August, official figures showed on Wednesday, its first reading above 3% since March and well above the Bank of England's 2% target.
The rise was driven largely by a 23% year on year surge in motor fuel costs, with petrol prices climbing to their highest level since November 2022 and electricity, gas and other household fuel costs up 6% year on year.
AdvertisementGilt yields fell across the curve after the print, with the 30-year down to 5.907% having touched a 28-year high the day before, and the 10-year at 5.365%.
Nigel Green notes today's numbers land just a day before the Bank's Monetary Policy Committee announces its decision on Thursday, 17 September, and he does not expect a hike this week, even though he believes a hold carries its own risks.
The deVere CEO says the Bank has been here before.
He says a repeat of that pattern is a real risk this time.
Nigel Green says the bond market's reaction already hints at that unease.
He adds that the political backdrop raises the stakes further.
Nigel Green concludes households and businesses should not assume this week's hold means the pressure is easing.
Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept any
responsibility or liability for the accuracy, content, images, videos,
licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright issues
related to this article, kindly contact the provider above.
Comments
No comment