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The Bank of England and the European Central Bank both left rates on hold on Thursday but unlike following the announcement of their counterparts in the US, there were no fireworks.
Of course, it’s worth noting that the press conference is yet to happen so fireworks may fly when President Lagarde speaks but the announcement and statements that followed it didn’t give investors much to get excited about.
The one point of note was the reference to inflation projections being lower than in September “especially for 2024” which may be a precursor to Lagarde insinuating then the next move could be lower in the new year. How early may determine whether markets are forced to pare back very aggressive positioning.
The Bank of England announcement was arguably more notable despite offering no forecasts and there being no press conference after. The voting was unchanged from the last meeting, with three policymakers backing a rate hike, very much running counter to the message from the Fed last night.
Perhaps armed with new projections in February the message from the BoE will be very different but at this moment, that was rather more hawkish than many will have expected. And the statement still referencing higher for an extended period and higher inflation compared with other major advanced economies was clearly more hawkish.
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