“The MPC voted unanimously to leave policy on hold today,” noted TD Securities analysts in a recently published report reviewing the BoE’s announcements today.
Key quotes
“While the medium-term view remains largely intact, persistent Brexit uncertainty led to a significant downward revision to growth this year as the MPC sees heightened uncertainty and tighter financial conditions in the near-term. Carney’s message was one that suggests a May hike is now completely off the cards.”
“Rates: Brexit uncertainty continues to anchor ranges so the slightly dovish message extended the significant rally in gilts in recent weeks with profit taking come in. While data and uncertainty likely limits the scope for higher rates, that is the near-term path of least resistance.”
“FX: Today’s moderately dovish message from the BoE pressured GBP lower but initial losses reversed quickly as hopes for a more downbeat assessment did not materialize. Cable has come a long way since early January and we think selling pressure should ease unless fresh bearish catalysts emerge. We think spot could gravitate back above 1.30 as investors nervously await the next chapter of the Brexit saga.”
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