At Any Rate Global Rates: Dissecting the BoE’s hawkish cut, Scandi rate markets update
Aug 8, 2025
Francis Diamond, an analyst from JP Morgan, delves into the recent Bank of England meeting, illuminating their unexpected hawkish tone amid a 25 basis point rate cut. He also explores the influence of quantitative tightening on UK gilt yields alongside the evolving landscape of Scandinavian rate markets. Discussion highlights include Sweden's GDP growth and the potential for rate cuts, with insights into navigating economic indicators. Market reactions to these shifts, especially concerning the Norwegian economy, add to the lively discourse.
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BoE's Split Vote Signals Caution
- Francis Diamond highlights the MPC's 5-4 vote and the unusual second ballot on the cut.
- He says the narrow split signals a more cautious, hawkish communication from the Bank of England.
BoE Worries About Short-Term Headline CPI
- Francis Diamond notes the MPC removed 'two-sided' language and raised its expected CPI peak.
- He warns the Bank now prioritizes the upcoming short-term rise in headline inflation.
Cuts Likely Slower; November Bar Raised
- Francis Diamond says a September cut is now unlikely and the bar for November is higher.
- He still expects 25bp cuts in November and February, taking bank rate to 3.5%.