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MPC votes 8:1 against hikes, sentiment mostly positive –

No change in the MPC’s voting pattern: still one  proponent for a hike. The  minutes reveal a more complex picture.

GBP/USD initially jumps to 1.5430. This could change once the  data is digested. Update: as the document is read, there seems to be more positives than negatives, and the pound pushes higher.

From the minutes, on the positive side:

  • Core inflation is still subdued but may be firming
  • UK  productivity has begun increasing. In the past they were somewhat puzzled by productivity.
  • They see the domestic expansion as healthy. Recent figures have been OK.

And on the negative side:

  • They expect inflation to pick up later in the year, probably due to the diminishing effect of falling oil prices.
  • Considerable uncertainty over the impact of the pound on inflation.

more coming

The Bank of England’s Monetary Policy Committee was expected to leave the interest rate unchanged at 0.50% once again. The focus is on the votes of the 9 members, which are published at the same time since the previous meeting. In that meeting, 1  member out of 9, Ian McCafferty  voted in favor of a hike to 0.75%, but  Governor Carney and his colleagues all objected. Some had expected a unanimous vote on “no change” or even for one member to vote for more easing.

GBP/USD traded  just under 1.54 towards the publication.

Many had expected a dovish turn from the BOE, after the Chinese crisis and the ongoing worries about the global economy. The stronger pound serves as tightening.

The first impact comes  from the voting pattern and then the minutes are digested.

More:  GBP/USD: Corrective Rebound – SocGen

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.