The inflation report is apparently pound positive. GBP/USD jumped from 1.5235 to nearly 1.53, but if beginning to slide back. Update: the pair enjoys a second wind of gains, crossing 1.5320. This is already turning into a gain of over 100 pips.
Mark Carney and his colleagues seem bullish on the UK economy and see through the fall in oil prices. It’s “good news for British householdsâ€.
Here are some headlines from BOE Governor Mark Carney’s press conference that accompanies the release of the Quarterly Inflation Report.
- Inflation will likely fall further and be negative in the spring
- More inflation letters are on the way.
- The headline mask strong UK economy
- Global growth has been better
- Geopolitics are worrying. It’s coming just after a ceasefire has been agreed on Ukraine.
- Oil prices halved – unambiguously positive for the economy.
- ECB QE is good news.
- Global real interest rate have fallen further
- Financial conditions have improved despite higher volatility.
- Half a million new jobs created in the past year
- Wages are beginning to pick up.
- Wages and oil will boost solid spending
- Core of the financial system is resilient.
- Regarding EUR/GBP: appreciation of sterling pushed inflation lower, but it’s not the most important factor. “We do monitor it†but Carney does not seem worried.
- Wage growth pickup is still in its early days.
- No reason to believe that the inflation report was leaked.
- The jobs market is tightening in the way the Bank had expected it to do.
- Carney does see inflation rising above 2% in the 3 year horizon.
- Around 60% of components of the CPI are rising exactly at the historical averages.
- This is not a debt fueled expansion.
- Conscious of risk of persistence of low wage growth.
Recent UK data has been positive lately.
Here is how the move looks on the chart:
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