GBP: What to Expect from the BoE Minutes This Week The most important release for the U.K. this week will be tomorrows Bank of England minutes. That does not automatically mean that sterling will see a big move tomorrow because it would be contingent upon an unexpected announcement from the central bank. We know from the Bank of Englands Quarterly Inflation report that monetary policy committee members have grown slightly less dovish and expect their unemployment rate target to be achieved one year earlier than previously forecasted. Data has been mixed with manufacturing activity weakening but service sector accelerating. The BoE left monetary policy unchanged at its last meeting and back in October they widened access to liquidity insurance and lowered its costs with the hope of providing ongoing support to the economy. Their decision to maintain steady policy in October was unanimous and we the expect same to be true for November. However if there is even one member that favors an earlier withdrawal or believes that more QE is needed, sterling could react sharply as this would represent a shift in monetary policy bias for the central bank. Outside of the voting record, we expect a generally cautiously optimistic tone that should pose no major threat to the current rally in sterling.
Posted on: Wed, 20 Nov 2013 09:18:02 +0000
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