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BOE's Weale says early action on rates not needed

BOE MPC Weale now speaking 18 July 2016

GBP risk event as I warned

  • not sure if he will back rate cuts in Aug
  • no sense that businesses/households are panic stricken
  • avoiding market disappointment is not a reason to cut rates
  • to ease policy output weakness would need to be big enough to "more than compensate" for likely inflation overshoot
  • wage growth outstripping productivity weighs against fine-tuning rate cut

Full speech here

He also said:

  • MPC committed to taking whatever action is needed to support growth and return inflation to target over an appropriate horizon
  • "Of course I should stress that these are my own views, and other present and future members of the Committee may see things differently".

Weale has swung both ways on mon pol during the past 2 years.

GBPUSD has a look at the decent supply into 1.3300 that I highlighted on the hawkish comments before retreating. Don't forget that Weale is just one vote of 9 on the MPC and a majority decision carries the day. He also steps down at the end of August after a second 3-year term.

EURGBP broke down through first layer of bids into 0.8225. Larger interest awaits at 0.8300

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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