Deal or No-Deal, BOE Interest-Rate Bets Are Set to Change

(Bloomberg) — Uncertainty about the terms of Brexit are muddling expectations about the Bank of England’s monetary policy. The yield curve can always be thought of as a weighted average of different outcomes, but at this point, the risks are bigger than usual and more binary than dispersed — there will either be a Brexit deal or there won’t. Bloomberg Economics’ analysis based on the Overnight Index Swap curve suggests that if a deal is the difference between a 25-basis point rate cut or rate hike in May 2019.

To contact the staff on this story: Dan Hanson (Economist) in London at [email protected];Jamie Murray (Economist) in London at [email protected]

To contact the editor responsible for this story: Zoe Schneeweiss at [email protected]

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