BoE still has monetary weapons to fire in lower interest rates - TDS

Research Team at TDS, suggests that the only data released this morning in Europe was UK BBA loans for June and the mortgage approvals slipped from 41.8K to 40.1K, reaching their lowest level since March 2015.

Key Quotes

“The BBA also noted that business lending fell in June for the first time in 2016, due to uncertainty before the EU referendum.

Market focus though was on an interview with the BoE’s Weale in the FT this morning, where he has clearly changed his tune from 8 days ago and is now in favour of more stimulus. He's considered to be evidence-based, rather than necessarily outright hawkish. In last week's speech he wasn't exactly saying no to further stimulus, but that he just needed to see more evidence first. It seems that Friday's PMIs were enough for him, as he noted that they were "a lot worse" than he had expected, and "the best short-term indicator we have at the moment.".

He also added that "the material point is that they were collected after July 12, so after the initial shock of the referendum." On what kind of stimulus to expect, he was "insisting the BoE still had monetary weapons to fire in lower interest rates and an extension of QE" and that "asset purchases are still likely to be effective."