BOE’s David Ramsden and Silvana Tenreyro are speaking to a Treasury Select Committee


  • Sees Real Risk That Brexit Uncertainty Means Business Investment Could Turn Out Weaker Than In BoE Central Forecast
  • Business Investment Growth Might Not Compensate For Sluggish Consumption Growth Over The Forecast
  • Resilience Of Consumers May Surprise BoE Again Over Forecast Horizon As Squeeze In Real Incomes Eases
  • Measures Of Domestically Generated Inflation Are Consistent With There Still Being Some Slack In The Economy
  • Measures Of Domestically Generated Inflation Generally Remain A Little Below Levels Consistent With The 2% Target
  • No Sign Of Second Round Effects Onto Wages From Higher Recent Inflation
  • Inflation Expectations Appear Well Anchored, Despite The Sharp Rise In Headline Inflation
  • Loss Of Market Confidence Could Lead To Higher Boe Rates, Weaker Sterling
  • A Majority Of MPC Members Saw A Case For Removing Monetary Stimulus In Coming Months, I Wasn’t In This Majority
  • Will Approach Each MPC Meeting As It Comes, Including November


  • If UK Economy Follows Path Broadly Consistent With Aug Central Projection, Policy Could Need To Be Tightened By A Greater Extent Than Markets Expect
  • Possible At Some Point, When Brexit Terms Clear, Demand Could Adjust Sharply, Requiring A Strong MonPol Response
  • Rise In UK Net Exports After Currency Fall May Not Happen
  • Most Measures Of Domestically Generated UK Inflation Have Been Below Target-Consistent Levels
  • Wage Growth Has Been Very, Very Weak
  • Some Evidence That Premature Rate Increase That Turns Out To Be A Mistake Could Need More Cuts In Future
  • MPC is far from the point at which we will unwind QE


The comments so far aren’t exactly giving the market the comforting feeling that we’re going to get a hike in Nov. There’s not too much to be taken from this is not a meeting to give clues about upcoming decisions. However, Carney will be what the market is waiting for and if he doesn’t give any hints about policy changes, or is even remotely dovish in his warnings about risks to come then the quid could suffer.
So far, GBPUSD has fallen to 1.3245 after the run to 1.3286 around the CPI data.
Ryan Littlestone

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