Posts

Benefits of Portfolio Diversification

BoE Interest Rate Decision | MPC Vote Unchanged, Cut or Hike?

It’s time to prepare for the upcoming BoE Interest Rate Decision. Similarly to The FED, The BoE has attempted to raise rates but has had to succumb to economic factors and reduce them again.

As with all Central Bank Interest Rate Decisions, there is always a risk of massive volatility spikes.

In July 2016, the consensus was expecting a drop from 0.5% to 0.25%. Previously the rates had been a steady 0.5% for over seven years. The consensus was wrong, but The BoC did drop the rate at the next meeting the following month.

They remained there until November 2017, when they increased back up to 0.5%. By August 2018, they were at 0.75%, the highest they’d been since February 2009. Analysts expected that The BoE would drop the rate down to 0.0% in December 2018, but they held firm.

Then a pandemic hit, the economy went into meltdown and central banks needed to intervene. In March 2020, The BoE dropped the Interest Rate to 0.25%. Analysts have had a hard time forecasting what The BoE will do.

The expectation at the time was for 0.0%, but again The BoE didn’t oblige.
With Rates at 0.1%, the BoE has room to go lower, but the consensus suggests they won’t drop further, but they’ve been wrong before.

Interest Rate Decisions always carry the potential for colossal volatility spikes and should be considered a hazardous time to trade.

Are you a news trader?

Or maybe a breakout trader?

If you plan to trade The BoE Interest Rate Decision, Tweet us how you plan to tackle the volatility storm should it surface!

Brought to you by Darwinex: UK FCA Regulated Broker, Asset Manager & Trader Exchange where Traders can legally attract Investor Capital and charge Performance Fees.

Risk disclosure:

https://www.darwinex.com/legal/risk-disclaimer

Content Disclaimer: The contents of this post (and all other posts’) are for educational purposes only, and are not to be construed as financial and/or investment advice.