Leading Indicators | Taking pause: rate cuts unlikely for the Fed and BoE this week
Discover key economic and financial metrics, and what to look out for in the week ahead.
19 March 2024
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US Fed and BoE are expected to keep interest rates unchanged this week, while the Bank of Japan implemented its first rate hike since 2007
It is expected that the central banks in the US and UK will keep interest rates unchanged this week. However, the Bank of Japan implemented its first rate hikesince 2007 today and ended a seven-year run of negative interest rates, lifting its base rate to a range of 0.0% - 0.1%.
Is the labour market starting to soften? UK wages grow at their slowest pace since October 2022 in January
While the BoE is expected to maintain its 5.25% base rate in March, the softening labour market may indicate impending rate cuts. UK wage growth slowed to a 15-month low (+6.1%) in January, while job vacancies declined and payrolled employees contracted.
Cost of debt in the UK aligns with the US, but remains elevated
The UK 5-year SONIA swap rate is currently 3.94%, up +32bps since the beginning of the year. US swaps are also elevated and are mostly in line with the UK’s swap rate.
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