The most hawkish member of the MPC is flagging economic weakness but says rate cuts are not a magic bullet. Weak sterling will offset inflation gains made via the soft economy he says while saying one factor behind the weak pound is the risk premium associated with holding UK assets. The pound is more likely to be influenced by the weak economic outlook rather than the bank rate, he says.
One more excuse to sell the pound, if one ever needs an excuse. As Sean Lee says, it’s never too late to sell cable!
