UK: Lot of developments taking place - BBH

Research Team at BBH, notes that the two members of the UK MPC seemed to distance themselves from the dovishness of recent comments from Governor Carney and the minutes from the BOE meeting this week. 

Key Quotes

“They want more hard data post-Brexit.  Sterling rallied a little more than two cents before the weaker than expected retail sales, whose survey period extended until July 2, saw it drop nearly three-quarters of a cent, leaving it little changed from yesterday's NY close. 

For the record, June UK retail sales fell 0.9%, which is half again as large of a decline as the median forecast (-0.6%).  Food sales were off 1.2%, and non-food purchases fell 0.8%.  The weaker consumer confidence surveys warn of downside risks going forward.  We suspect that on balance the majority of the MPC will be inclined to ease policy next month, recognizing that monetary policy acts with a lag, even though the mark down of sterling may boost exports and spur some import substitution by domestic producers.”