The MPC decided to leave the interest rate unchanged at 0.5% keeping its asset purchasing program unchanged at £435b as expected.
The British pound rose across the broad as The decision to keep the interest rate at 0.5% came this time with smaller majority, as The MPC member and BOE chief economist Andy Haldane has joined both of Saunders and McCafferty in preferring raising the interest rate by 0.25%.
The MPC language in its economic assessment was also much more hawkish than was predicted referring clearly to economic evolving expecting the inflation in UK to pick up in the short term by slightly more than expected.
The MPC members see now that that Q1 GDP slowdown is temporary and it is expected to grow by 0.4%, as the household spending has bounced back up strongly with continued improving of the labor market.
The committee has indicated in the same time that the wages inflation pressure remain barely positive and UK GDP yearly expansion is still standing well below 3% yearly.
The MPC sees that it will be appropriate to move in the path of tightening by a gradual and limited way showing that the reduction of BOE's QE asset holdings will be by a gradual and predictable pace.
The committee members voting and language pave the way for bank rate hiking by the end of this year driving GBPUSD to stand now well above 1.32, after it failed to do so on the back of Theresa May winning of voting on key Brexit laws in the House of Commons.
Kind Regards
Global Market Strategist of FX-Recommends
Walid Salah El Din
The British pound rose across the broad as The decision to keep the interest rate at 0.5% came this time with smaller majority, as The MPC member and BOE chief economist Andy Haldane has joined both of Saunders and McCafferty in preferring raising the interest rate by 0.25%.
The MPC language in its economic assessment was also much more hawkish than was predicted referring clearly to economic evolving expecting the inflation in UK to pick up in the short term by slightly more than expected.
The MPC members see now that that Q1 GDP slowdown is temporary and it is expected to grow by 0.4%, as the household spending has bounced back up strongly with continued improving of the labor market.
The committee has indicated in the same time that the wages inflation pressure remain barely positive and UK GDP yearly expansion is still standing well below 3% yearly.
The MPC sees that it will be appropriate to move in the path of tightening by a gradual and limited way showing that the reduction of BOE's QE asset holdings will be by a gradual and predictable pace.
The committee members voting and language pave the way for bank rate hiking by the end of this year driving GBPUSD to stand now well above 1.32, after it failed to do so on the back of Theresa May winning of voting on key Brexit laws in the House of Commons.
Kind Regards
Global Market Strategist of FX-Recommends
Walid Salah El Din