BoE Governor Says Too Early For Rate Cuts, Focus On Autumn Statement

Attention shifts to the UK as the Bank of England’s Governor left the door open for further monetary policy tightening while economists are ready to listen to the UK’s Chancellor Autumn Statement later in the afternoon.Some media reports indicate that the Autumn Statement could include tax cuts as well as a crackdown on benefits. The content of the  Autumn Statement could influence the British pound’s value against its competitors.
 BoE Governor Says Too Early To Cut RatesDuring his remarks before the Treasury Committee, the BoE’s Governor, Andrew Bailey, suggested that markets underestimate the risk of persistent inflation. The BoE’s head appeared “hawkish” saying that it would be far too early to consider interest rate cuts while MPC member Catherine Mann noted that “I think actions speak louder than words, especially when you deal with the markets. That is a key reason why I believe it’s important to have action, in showing commitment to the target,” implying that further rate hikes could be an option.Andrew Bailey said that the UK’s central bank was one of the first to raise borrowing costs and added that everyone should be focusing on the 2% inflation target, rejecting the idea of setting a new target of around 3% that would accommodate the present financial conditions. As a result of the BoE policymakers’ comments, the pound rose, hitting a two-month high against the US dollar.
 RBA Minutes Show Will To Act Against InflationThe Reserve Bank of Australia (RBA) released the minutes of its last governing board meeting on Tuesday. Market analysts scrutinized the content and noted that the RBA’s policymakers seem to be willing to take further action in order to control inflationary pressures. The minutes showed that the RBA raised borrowing costs on November 7th to counter a growing mindset among businesses that cost increases could be passed on to their clients.The council’s members noted that rising house prices in the country could indicate monetary policy was not especially restrictive and stressed that the benchmark interest rate remains lower when compared to other economies.
 OPEC+ Ministers Meet This Weekend To Discuss Oil ProductionOPEC+ energy ministers are due to meet this weekend to discuss oil production levels and adjust their policies accordingly. Some commodity analysts have warned that more oil production cuts could be on the way, especially from the side of Saudi Arabia while the US has ramped up its own production to cover the deficit caused by OPEC+ decisions in the last few months.JP Morgan analysts said in a report that Brent crude oil prices could remain flat in 2024, averaging $83 per barrel. The same report forecasts oil prices to hover around $75 per barrel in 2025. JP Morgan economists expect Russia and Saudi Arabia to extend their voluntary production/export cuts through Q1 2024.More By This Author:Canadian CPI Inflation Likely To Drop In OctoberUK CPI Inflation Hits A Two-Year LowGlobal Supply Chain Hardships In 2024?