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Bank of Montreal: Raises its price target for Eli Lilly (LLY.N) from $930 to $1,100.November 6th - The Bank of England voted to keep interest rates unchanged at 4%, but sharp divisions within its Monetary Policy Committee (MPC) suggest a rate cut may be imminent. Faced with inflation exceeding normal levels in recent months, the nine members of the MPC voted 5-4 to maintain borrowing costs. However, in a new set of economic forecasts released today, the Bank of England stated that it expects inflation to have now peaked and will decline in the coming months, stabilizing at slightly above 2% within two years. Bank of England Governor Bailey said, "We are keeping interest rates at 4% today. We still believe that rates will gradually decline, but we need to ensure that inflation returns to our 2% target level before we cut rates again." The fact that four MPC members voted in favor of a rate cut, and the governors hints of further cuts, has fueled speculation that the Bank of England could cut rates as early as next month, shortly before Christmas.On November 6th, in its latest interest rate decision, five members of the Bank of England voted to keep interest rates unchanged, while four voted to cut rates. This was the first time committee members explained their rationale for their decisions in a public communication. Bailey stated that "upside risks to inflation have diminished" since August, choosing to hold rates steady and await further evidence. He added that his position was based on the interest rate path projected by the "forward-looking Taylor rule," which suggests three more rate cuts over the next year. Joining Bailey in voting to keep rates unchanged were Deputy Governor Lombardelli, Chief Economist Peale, and external members Mann and Green. For the first time since joining the committee in 2023, Deputy Governor for Financial Stability Bridenstine disagreed with Bailey, favoring a rate cut. She stated that "upside risks to inflation have diminished," while downside risks to demand were "more apparent." Deputy Governor for Markets Ramsden, along with external members Taylor and Dingela, were other members leaning towards a dovish stance.On November 6th, the Bank of England adjusted its key message regarding the interest rate outlook. In its previous statement, the Bank of England considered a "gradual and cautious approach" to interest rate cuts appropriate, but now it states: "Interest rates are likely to continue to decline gradually if the decline in inflation continues." The Bank of Englands decision to keep interest rates unchanged was not unexpected for investors. Wednesdays interest rate futures pricing suggested only a one-in-three chance of a 25 basis point cut. However, the 5-4 vote, and signs that Bailey might soon change his stance, could boost bets on a rate cut at the Bank of Englands next meeting in mid-December. Investors on Wednesday estimated a roughly 60% chance of a rate cut next month. The Bank of England also released, for the first time, summaries of the views of individual members of the Monetary Policy Committee, as part of its forecasting process reform. The bank expects economic growth of 1.5% this year, up from its previous forecast of 1.25%, and 1.2% in 2026, roughly unchanged from its August forecast.According to institutional data and Reuters calculations, Russias marine diesel exports fell 4% month-on-month in October.
