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“The Bank of England held its policy rate at 0.75%, but hinted towards a slightly faster pace of tightening under their assumed orderly Brexit scenario,” ANZ analysts pointed out in their daily market report.

Key quotes

“On that front, Governor Carney outlined that the Bank remains ready to act if a Brexit deal isn’t reached, stating “since the nature of EU withdrawal is not known at present, and its impact on the balance of demand, supply and the exchange rate cannot be determined in advance, the monetary policy response will not be automatic and could be in either direction”.

“He also suggested that a no-deal Brexit could possibly drive higher inflation, by triggering a supply-side shock that warrants higher interest rates. The GBP rallied and gilts slid.”