10 Jul 2014
BoE on hold as expected - ING
FXStreet (Łódź) - James Knightley from ING comments on today's BoE interest rate announcement, speculating that the decision to leave the Bank Rate and the size of the asset purchase facility unchanged was likely unanimous.
Key quotes
"But given the shift in the Bank of England’s rhetoric over recent weeks we suspect that the August BoE forecast update could lead one or two MPC members possibly voting in favour of a small rate hike next time."
"The admission in the June MPC minutes that 'labour market slack could be absorbed more quickly than had previously been expected' and the fact that the MPC felt it was 'somewhat surprising' that financial markets were pricing in a low probability of a rate move this year are clear pointers to this."
"Nonetheless, we probably need to see some stronger wage numbers before a majority on the MPC are convinced that labour market slack is starting to get much thinner."
"With headline wage growth currently rising just 0.7% on a 3M/YoY% basis there is not much sign of that happening just yet."
Key quotes
"But given the shift in the Bank of England’s rhetoric over recent weeks we suspect that the August BoE forecast update could lead one or two MPC members possibly voting in favour of a small rate hike next time."
"The admission in the June MPC minutes that 'labour market slack could be absorbed more quickly than had previously been expected' and the fact that the MPC felt it was 'somewhat surprising' that financial markets were pricing in a low probability of a rate move this year are clear pointers to this."
"Nonetheless, we probably need to see some stronger wage numbers before a majority on the MPC are convinced that labour market slack is starting to get much thinner."
"With headline wage growth currently rising just 0.7% on a 3M/YoY% basis there is not much sign of that happening just yet."