Good afternoon,
Yesterday saw the Bank of England’s monetary policy committee convene for the 4th time this year, to discuss the economic outlook and vote on an interest rate rise.
The market’s ears were pricked even more than usual, following the Fed’s shock change of stance last week. Some expected the bank would strike a similar tone, and confirm that interest rate hikes could be on the cards sooner than foreseen.
Those betting on this outcome were in for a surprise, as only one member out of eight (Andy Haldane) voted for a rate rise. The accompanying statement revealed that the remaining policy setters still see the current rise in inflation as transitory.
The pound to euro exchange rate promptly fell half a percent to 1.165, though it has regained some ground since then. It’s reaction against the US dollar was muted in comparison, only 0.2% down and trading at 1.393 at time of writing.
Have a great weekend.
Thomas De Caluwe, Relationship Manager.
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