BOE interest rate decision and inflation report 02.08.2018

  • Vote for hike 9-0 , a unanimous vote
  • QE maintained at 435B£
  • Further rate hikes will be limited and gradual
  • 1yr inflation forecast 2.15% from 2.13%
  • 2 yr inflation 2.09% from 2.03%
  • 3 yr inflation 2.03% from 2.00%
  • Comment: Current rate path flatter than in May, implies 0.9% in 1 yr time, 1.0% in 2yrs, 1.1% in 3 years time ( that’s a smalls dovish counter balancing)
  • Unemployment rate expected at 3.9% in 2yrs time vs 4% in May
  • New on inflation has been erratic
  • Economic outlook to be influenced significantly by Households, businesses, markets to Brexit developments
  • Recent data seem to confirm the Q1 dip in economy was temporary
  • Near term global economy seen weaker than in May due to protectionist adverse effects
  • Net trade might be weaker than expected if recent developments in global trade cause a broader slowdown in global growth

The inflation report
The Monetary policy report and minutes
For slides and detailed data, please visit the BOE website

Carney is expected in 20 minutes to report on all we’ve seen and heard from BOE today here

It’s neutral,I am neutral …
GBP strengthen a bit , especially vs EUR we’re back on the 0.8845/55 support. I ‘ll trade the 1.3070-1.3160 range on cable with a sell the rallies EURGBP bias for now as long as EU leaves Brexit comments behind.

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