UK: Monetary & fiscal policy in the spotlight – Nomura

Analysts at Nomura point out that the in the UK, the Chancellor presents his budget to the House of Commons on Monday at 3.30pm, but this is probably not going to be quite as exciting as some of the budgets presented to the European Commission recently.

Key Quotes

“In fact recent UK public finance data suggest the issues are quite the opposite of Europe’s periphery – narrower deficit outcomes and how to allocate this between fewer Gilts and T-bills. In short, we see £11bn less of a funding requirement, with around £8bn of that showing up in less Gilt issuance than previously expected.”

“We do not see much need for the Bank of England (BoE) to alter its policy guidance in November. Brexit remains a sizeable risk, and while economic growth could surprise on the upside in Q3, weaker global growth and recent market moves could be negative further out. We see the Bank sticking with a similar inflation profile as in August. More hawkish members may position themselves to vote for a rate rise in early 2019, Brexit notwithstanding.”