BoE: Change of leadership – Nordea

Analysts at Nordea Markets point out that Andrew Bailey will take over the reins in Bank of England 16th of March next year and it's kind of tricky to judge whether he will lean in a firmer or softer direction than Carney.

"We would argue that Carney has moved in a relative hawkish direction in recent quarters compared to the overall mood within the MPC. Had it been a few years ago, it would have been almost impossible to find a more dovish BoE boss than Carney (maybe Draghi or Ingves would have been the exceptions), but now-a-days a pragmatic approach from Bailey make take the MPC in an overall slightly softer direction compared to Carneys most recent stance. Given that Bailey joins straight from running a regulatory office, he may though initially be viewed as a slightly hawkish choice. We don't see why Bailey should rock the boat on the narrative that risk/reward still favours a dovish tilt on the next move from Bank of England - and now that BoJos exit-deal is fully priced in, maybe markets will start to trade on the very weak UK key figures again? We lean long in EUR/GBP and short in Cable in to Q1-2020."