FXStreet (Guatemala) – Jane Foley, Senior Currency Strategist at Rabobank is putting the BoE in the hawkish camp still, despite just one member going for a rate hike.
Key Quotes:
“Only one MPC member, McCafferty, voted to hike interest rates at the August MPC meeting. However, ahead of that meeting there was speculation that up to four MPC members may have been prepared to call for an immediate policy change. Weale had indicated that if it wasn’t for Greek concerns that he may have been ready to vote for a policy tightening in July.
Miles had remarked in July that waiting too long to start a “gentle amble” to higher interest rates would be a bad mistake and in June Forbes was reported as stating that rates could rise in the “not too distant future”. The fact that only one member voted for a rate hike in August resulted in a spate of headline referred the BoE as being dovish.”
“The fact remains, however, that the BoE is the only major central bank aside from the Federal Reserve to be currently preparing the market for a tightening of policy. Even though we do not expect the majority of the MPC to vote in favour of an immediate rate hike until May next year, we still consider the Bank as a hawkish central bank.
It is no coincidence that sterling is the second best performing G10 currency after the USD on a 12 mth view and given that the Bank is poised to tighten sooner or later we expect sterling to remain a strong performer over the coming year or so.”
(Market News Provided by FXstreet)