BoE: The required caution on monetary easing will continue to support the Pound Sterling – MUFG
|The Pound Sterling (GBP) has not moved much in response to the February UK CPI data released by the Office for National Statistics (ONS). Economists at MUFG Bank analyze GBP outlook.
Weaker than expected CPI but services a little stronger
The data revealed overall and core measures falling 0.1ppt more than expected to 3.4% and 4.5% respectively. Services CPI, a big focus for the BoE, also fell from 6.5% to 6.1%, but by 0.1ppt less than expected.
The MPC meeting on Thursday may see a change in the vote composition. In February the vote was 6-2-1 with Dingra the voter for a cut. Mann and Haskel voted to hike and we could see one or both drop their votes for a hike and join the majority but overall we expect pricing for the first cut in August to be largely maintained, limiting moves for the pound. Overall, the required caution on monetary easing will continue to support the Pound.
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.