No change in the vote in the UK MPC: two members still voted for a rate hike in November. Other messages are certainly hawkish.
The news, coming on top of lower expectations and a lower pound, is sending GBP/USD back up from the lows, from below 1.56 to 1.5625. Update: it’s already a 50 pip bounce. See the chart below.
- There is a “material range of views on risks to outlook†within the 9 member committee.
- Some MPC members said there was risk share capacity absorbed faster than assumed – hawkish
- They do see a risk of slack soon exhausting, boosting CPI pressure – hawkish
- They do worry about Europe.
- Housing activity has slowed more than predicted.
These are the minutes for the November decision, in which the Bank of England decided to leave policy unchanged, as widely expected. In the previous decisions, two members voted for a rate hike. Martin Weale and Ian McCafferty..
GBP/USD didn’t wait for the minutes and already dipped below 1.56 before the publication. — more coming —
Expectations for the first rate hike in the UK have been pushed back of late. Lower inflation, with a trough of 1.2% y/y in September, alongside some other cooler figures, have changed expectations.
The BOE’s latest quarterly inflation report was quite dovish and acknowledged the change in inflation and rate expectations.
More: What To Do With GBP At Current Levels? – Credit Agricole
