The Bank of England interest rate and decision and Minutes are out today at 12.00 GMT
That headline isn't going to surprise any of my regular readers but in the wake of the FOMC rhetoric last night I just thought it worth throwing out there again.
Previously the BOE MPC has talked of weighing up all options including rate cuts but generally stressed that the next move will be up ( if only to create some wriggle room should the proverbial hit the fan down the road.
In the wake of Yellen's honest appraisal of the fragile global scene it's unlikely, and a tad daft, for Carney & Co to have any different view. The whole world is blaming each other and has been for a while and that will continue as politicians and central bankers justify their huge salaries and expense accounts. But it's not just that. There is/has long been a stance of denial that is only now perhaps coming to its senses.
It's not unreasonable to think that one or two MPC members might vote for a rate cut. Indeed Martin Weale, a known hawk previously said last week that the BOE could cut rates and re-start QE if needed. I'm not saying it would be a preferred option but in these days of low/negative rates it can't be ruled out. Yesterday's fall in the pound on OBR lowering UK growth and inflation forecasts highlighted the fragility in both the economy and the currency.
In terms of current price action, as Ryan rightly pointed out the fact that GBPUSD has just blitzed through sell interest around 1.4350 doesn't mean the pound is strong. A fact witnessed by its performance across a whole range of ccys inc EUR, CHF, JPY, CAD, AUD, SGD and, well need I go on ?
Indeed the subsequent retreat from 1.4382 to 1.4340 as I type reminds us that there's plenty more offers into 1.4400-20 and it's hard to see that being challenged seriously before we hear from the MPC.
So I remain bearish UK and GBP in general. Let's see if the BOE agree.
" Well I blew it yesterday Governor. See if you can do any better"
