There are big inflation risks on both sides, says the BOE’s chief economist Spencer Dale. His central view is that inflation risks should subside as temporary effects wane and te economy recovers. If inflation expectations rise, the BOE would need to tighten though, to bolster faith in the BOE’s inflation fighting credentials.
Cable is edging higher, along with EUR/USD as the single currency bounces from near 1.3350. Cable is now at 1.5645.
