"One and Done" Rate Hike Triggers GBP Selling
|A dovish rate hike from the Bank of England on Thursday has triggered a sell-off in the pound while yields on UK debt have also fallen.
We may be jumping to the wrong conclusions prior to the press conference with Mark Carney but the impression that the MPC has given is this is a "one and done" rate hike. Dropping the reference to the market under-pricing future tightening while at the same time referencing the market pricing in two rate hikes over the next three years doesn't suggest another rate hike is planned any time soon.
With inflation expected to return closer to target over the next 12 months, the chance to raise rates may not exist for long and policy makers were clearly keen to seize the opportunity while it still could.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.