FXStreet (Guatemala) – Analysts at ANZ noted that the BoE’s monetary policy committee (MPC) was slightly more dovish than expected last week.
Key Quotes:
“The MPC voted 8-1 to keep rates on hold, against market expectations that at least two members would dissent.”
“In addition, the near term inflation forecast for Q4 2015 was downgraded to 0.3% y/y from 0.7% y/y in May and the 2016 forecast was lowered by 0.1ppts to 1.5% y/y.”
“The downgrade to the BoE’s inflation forecasts was driven by a combination of lower oil prices and the ongoing domestic currency strength. Although the currency is not a target of policy, it can have a bearing on policy decisions in the short term as it impacts on inflation and growth.”
“If sterling stays strong on a TWI basis, the timing of the first rate rise is likely to be pushed back. We think that Easter next year may be the optimal timing for the first move.”
(Market News Provided by FXstreet)