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If No BOE Rate Hike Until 2018 Sounds Crazy, What About a Cut?

  • Markets have pushed back bets on first rate rise to 2Q 2018
  • Investors see growing possibility of looser monetary policy
Mark Carney.

Mark Carney.

Photographer: Luke MacGregor/Bloomberg
Updated on

Here’s one question we never thought we’d ask in 2016: Is the Bank of England going to cut interest rates?

With traders starting to price in looser policy at the BOE and market expectations for the first increase in borrowing costs since the financial crisis pushed back to 2018, questions are shifting from how long officials will sit tight to whether the next move might even be a reduction. The Bank of Japan’s decision to introduce negative rates last week prompted renewed speculation about whether a similar move in the U.K. could ever be possible.