- MPC continues to judge there is scope to make greater inroads into slack before raising bank rate
- wage growth or investment is main domestic risk to economy
- rate hike will be gradual and to a level well below pre-crisis average
- margin of spare capacity in UK economy ” broadly closed” in 3 years
- forecasts unemployment rate at 5.9% in 2 years time vs 6.4% prev forecast in Feb
- inflation forecast sees 1.9% as prev. based on market interest rates
- prelim Q2 GDP growth of 0.8% expecting final figure of +0.9%
- sterling appreciation likely to put temporary downward pressure on inflation for next 2 years
I did warn in my earlier post that the GBP longs were likely to be disappointed
GBPUSD 1.6760 lows since the release. currently 1.6784
GBPJPY prime mover also at 170.70 but EURGBP 0.8168 falling back from offers at 0.8185
Full report here
