Friday 4th November 2022
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It could be the worst of times, or something even worse than that. The Bank of England painted two possible scenarios overnight, after raising rates by the expected 75 basis points. In scenario one, the bulk of their work is done and rates don’t move much higher. In scenario two, rates rise to 5.25% and the country faces a two-year recession. Talk about hedging your bets. NAB’s Ken Crompton says it shows the difficulties faced in the UK and Europe, in comparison with the US, where the Fed is fighting continued high consumption levels - evidenced by high imports in the Balance of Trade overnight – and resilience in the employment market. On that point, tonight’s non-farm payrolls will be eagerly watched. We also look at what to expect in today’s Statement of Monetary Policy from the RBA.
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