Bank of England is not likely to tweak its policy language to hawkish, short GBP/USD?
Bank of England explained last month that the Q1 slowdown was temporary. Six weeks later, the picture isn’t much clearer which leaves very little chance of any policy change today.
- It is a 7-2 vote in favour of keeping the benchmark rate at 0.5%.
- Activities in the economy have been mixed since the MPC last met in May. The industrial production data for April was weak while the retail sales figures for April and May were buoyed.
- We doubt the committee will alter its view on how fast it expects the economy to expand in Q2.
- GBP/USD hasn't got much of a bump from Theresa May winning a key Brexit vote and traders don't appear to be bearish enough for any rebound to gather traction through forced position adjustments.
Fullerton Markets Research Team
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