UK: BoE and Construction PMI in focus - TDS

Analysts at TD Securities are looking for the UK construction PMI to come in unchanged at 53.1 in July (mkt 52.8), seeing some stability after a volatile first half of the year.

Key Quotes

“More importantly for markets, the Bank of England meets today to set policy, and we and the market expect a 25bps hike to Bank Rate, bringing it to a nearly 10-year high of 0.75%.”

“We expect an 8-1 vote in favour of a hike, but such a strong majority in favour should be relatively unimportant for future policy prospects as we think the MPC is comfortable with markets expecting a pause until well into 2019 (we expect the next hike in May-19).”

“What will be more telling will be the Bank's first ever publication of an estimate of the neutral rate, and how the MPC characterises the speed of convergence toward it.”