Comments by BOE policymaker, Michael Saunders

  • Rebound in activity appears to be a bit faster than in May forecast
  • But the rebound has reflected a benign window, which may be closing now
  • Unemployment likely to rise significantly in coming quarters
  • Risks lie on the side of a slower recovery over the next year or two
  • And a longer period of excess supply may materialise than in the August forecast
  • If these risks develop, then further easing may be needed

This will just bring more attention to the topic of negative rates for the BOE, especially with the spectre of a no-deal Brexit looming and the government's furlough program set to expire in October - bringing about negative economic risks.

Add that to the likelihood that inflation pressures will stay subdued for longer, you can see why the BOE is starting to prep the market for more action down the road.

The pound has eased a little on Saunders' remarks, with cable slipping from 1.3305 to 1.3290 but major currencies are still looking more mixed and taking a breather ahead of the release of the US jobs report later in the day.