James Smith, developed markets economist at ING, points out that the Bank of England has unanimously voted to keep rates on hold but as has been the case for the past couple of meetings, there is an increasing air of caution creeping into the narrative.

Key Quotes

“The thing that really stands out to us in this latest statement is that the Bank appears to be getting more wary about the outlook for wage growth. Don’t forget that this has been a key pillar of the Bank’s hawkish rationale over the past couple of years, and came amid increased skills shortages in the jobs market.”

“But while policymakers continue to emphasise that pay growth has strengthened, it notes that the labour market “does not appear to be tightening further”. Importantly, policymakers note that “political events” could lead to another prolonged period of “entrenched” uncertainty – and this, in turn, could hurt prospects for inflation.”

“At the very least, this just signals that Brexit will likely continue to dash any thoughts of policy tightening over coming months.”

“In short, while the Bank still notes that rates may need to rise if Brexit goes smoothly, the risks surrounding Brexit, as well as global growth, mean this tightening is increasingly unlikely to materialise.”

“Having said that, the fact that the BoE is maintaining a tightening bias at all, does hint that policymakers are – and will likely remain - reluctant to follow the Federal Reserve and European Central Bank in the direction of policy easing in the near future.”

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD at daily lows, dragged by Sterling

Turmoil around Brexit and the absence of any other relevant catalyst weighs on the common currency, EUR/USD battling with 1.1120.


GBP/USD loses 1.2900 as Parliament says “NO”

The UK Parliament has rejected PM Johnson’s time table, lifting odds of an upcoming election in the kingdom. Volatile trading ahead of more clarity as the drama continues.


USD/JPY holds steady above mid-108.00s

The USD/JPY pair failed to capitalize on the early uptick to multi-day tops and is currently placed at the lower end of its daily trading range, just above mid-108.00s.


Gold heads higher as Brexit uncertainty prevails over trade-deal hopes

In the final hour of trade on Wall Street, spot gold was moving in on the 1490 level, trading higher by 0.22% having travelled between a low of $1480.91 and a high of $1489.04.

Gold News

Top 3 price prediction BTC, ETH, XRP: CFTC takes a surprisingly bold step to move cryptos forward

The CFTC is open to Ethereum futures without anyone picking-up the ball. XRP is currently the only bullish option currently in the Top Three. Current volatility levels have last been seen in May.

Read more