Bank of England meeting didn’t surprise the market and was unphased by this week's stronger than anticipated service inflation data, Pooja Kumra, Senior European & UK Rates Strategist at TDS, notes.

BoE meeting comes with close to no surprises

“Today's BoE meeting came with minimal surprises, with the MPC keeping the Bank Rate on hold with an unchanged 7-2 vote as Ramsden and Dhingra continue to favor a cut.”

“Markets appear relieved that this week's stronger than anticipated service inflation data did not derail the MPC's rate cut cycle guidance. In fact, the Committee also acknowledged that the stronger than anticipated service inflation was driven by one-off pay factors.”

“The front-end is now pricing in around 15bp in cuts for August meeting and around 50bp in total for 2024. We believe risks could be 'finely' balanced as there is still a lot of information markets need to absorb ahead of the next meeting, including elections on July 4 and CPI data on July 17.”