GBPUSD & EURGBP post BoE

GBPUSD & EURGBP post BoE


BoE Vote split comes in at 6 – 3
BoE keeps rates and asset purchases unchanged at 0.50% and 435bln respectively.

– Vote was 6-3 in favour of unchanged Bank Rate, unanimous for QE at 435B/APF at 10B

– Haldane, McCafferty and Saunders dissented, voting instead for a June hike

– Majority on MPC             still reassured Q1 softness was largely temporary, but preferred to wait for further data on economy

– Dissenters saw greater likelihood erratic Q1 growth would rebound, saw upside risk to wage inflation

MPC             will not reduce stock of QE until Bank Rate reaches 1.5% (prev 2%)

– Reduction in QE stock will be at a gradual and predictable pace; over number of years

– Ongoing tightening of MonPol remains appropriate over forecast horizon

– UK economy to develop in line with May QIR forecast

– Global data since May QIR was mixed, financial conditions had tightened