Archive

BoE Still Seeking Evidence

• Guidance around an unsurprisingly unchanged BoE rate preserved the necessary uncertainty about when it might ease again, albeit with a broad bias to do more later.
• Dave Ramsden joined the dovish dissent, taking it to three for a 25bp cut, but none of them are in the MPC majority revealed in May as leaning towards a slower pace of cuts.
• We believe the August decision remains finely balanced for the majority. Ongoing data resilience, discouraging the Fed and ECB from easing, should also keep the BoE on hold.

By Philip Rush

Philippines: 25bp Rate Cut to 5.25% (Consensus 5.25%) in Jun-25

• The Bangko Sentral Ng Pilipinas (BSP) reduced its Target RRP Rate by 25 basis points to 5.25%, a move that aligned with consensus forecasts and was prompted by a sharply lower inflation outlook for 2025.
• The decision reflects growing concerns over a global economic slowdown, persistent US trade policy uncertainty, and a widening domestic output gap, all of which argue for a more accommodative monetary stance.
• Future rate decisions will hinge on inflation dynamics, external policy shifts—especially from the US Federal Reserve—and the effectiveness of monetary easing in supporting domestic growth without compromising price stability

Sweden: 25bp Rate Cut To 2% (Consensus 2%) in Jun-25

• The Riksbank cut its policy rate by 25 basis points to 2%, in line with consensus expectations, citing weaker economic growth and a subdued inflation outlook.
• The decision reflects persistent uncertainty in both domestic demand and the global environment, with the central bank signalling a non-trivial probability of further easing should inflation remain below target and recovery falter.
• Future policy decisions will be highly data-dependent, with particular attention to inflation dynamics, labour market conditions, and the impact of ongoing geopolitical and trade-related risks.

Indonesia: Policy Rate Held At 5.5% (Consensus 5.5%) in Jun-25

• Bank Indonesia maintained the BI-Rate at 5.50% in June 2025, in line with consensus expectations, citing stable inflation and a resilient rupiah as key factors.
• The decision reflects a cautious approach amid persistent global uncertainties, with BI emphasising the need to preserve macroeconomic stability while supporting growth through accommodative macroprudential and payment system policies.
• The interest rate outlook remains data-dependent, with the central bank signalling potential for further easing if inflation and currency stability persist, but maintaining a prudent stance given external risks and the need to attract foreign capital.