BOE Rate Cut Is Now Much Less Certain After Brexit Announcement

(Bloomberg) -- Here’s one consequence of the Brexit deal the U.K. and European Union finally sealed on Thursday: money markets see a much lower chance that the Bank of England will cut interest rates next year.

Just two days ago, the market was pricing a full 25 basis-point decrease by November 2020 after policy maker Gertjan Vlieghe said continued Brexit uncertainty would probably require further monetary stimulus.

Now money markets see only a 60% chance that the central bank will lower its benchmark interest rate by 25 basis points by that time, according to MPC-dated Sonia swaps data from TP ICAP Plc.

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