BoE: MPC likely to signal that there is no bias on the direction of the next move - Rabobank

Jane Foley, Senior FX Strategist at Rabobank, notes that ahead of last month’s policy meeting BoE Governor Carney made clear his view that there are limits to the MPC’s willingness to look through inflation. 

Key Quotes

“In October, the sharp depreciation of sterling coupled with the aggressive adjustment higher in gilts yields appeared to spook policy-makers into backing down from their previous guidance that rates could be cut again this year.   The steady policy message in November combined with a spate of better than expected UK economic data and a perception that a ‘hard’ Brexit may now be less likely than it appeared in October have offered some support to the pound and calmed market conditions.  Although the Bank is likely to remain vigilant given the economic risks that are associated with Brexit, we expect the MPC to maintain steady policy through 2017 and to signal in December that there is currently no bias on the direction of the next move.”