BOE: A February rate cut on the cards – Goldman Sachs

Goldman Sachs analysts bet 4-to-1 odds on a surprise move of a Bank of England (BOE) rate cut next month.

Key quotes

“The possibility of a 10-basis-points rate cut taking the Bank rate to zero suggests positive risk-reward” in betting on lower OIS rates at the February meeting.”

“Forecasts more incentives for banks to lend under the Term Funding Scheme and a faster pace of bond purchases.”

“Even so, the U.K. yield curve is likely to steepen and front-end rates to remain supported, since the central bank is due to release further research on negative interest rate policy.”