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The Bank of England's recent hold on interest rates led to a slight hawkish repricing in the sterling curve, with only one member opposing the decision. Despite expectations of three rate cuts this year, data uncertainty looms due to upcoming corporate tax hikes and US tariffs, raising concerns about growth and inflation. The outlook for GBP remains cautious, with a preference for trading GBP weakness through Cable rather than EUR/GBP.
The Bank of England has maintained interest rates at 4.5%, with a notable shift as Catherine Mann has retracted her previous call for faster cuts, leaving only Swati Dhingra advocating for an immediate reduction. The committee appears to be leaning more hawkish, influenced by resilient employment data despite declining hiring sentiment. Upcoming redundancy notices will be crucial indicators to monitor ahead of the next meeting in May.
The Bank of England remains cautious about rate cuts despite a surprising vote from Catherine Mann for a 50bp reduction, indicating a potential shift in policy. Most officials maintain a hawkish stance, emphasizing a careful approach amid rising inflation forecasts and a deteriorating jobs market, although hard data on redundancies has yet to reflect this negativity.
Catherine Mann of the Bank of England expressed concerns that a 100 basis point rate cut over the next year would exacerbate inflation. She opposes this aggressive approach, emphasizing that it does not align with her views on future demand conditions and persistent inflation.
Catherine Mann of the Bank of England cautioned against cutting interest rates, citing inflation risks linked to Donald Trump's election as U.S. president. She emphasized that global shocks often drive inflation in the UK and highlighted the potential for increased economic volatility and trade fragmentation under Trump's policies. Mann advocated for a cautious monetary policy approach until inflation pressures show signs of easing.
Bank of England rate-setter Catherine Mann stated that monetary policy is influencing inflation more rapidly than traditional economic theories indicate. This allows policymakers to delay significant interest rate cuts, as rate decisions can immediately affect firms' pricing strategies, bypassing the usual 18 to 24-month lag.
The Bank of England has cut interest rates by 25 basis points, coinciding with the lowest inflation rate in the UK in three years at 1.7%. As investors await the upcoming Fed meeting, they anticipate potential rate hikes, which could lead to increased market volatility. The GBP/USD pair is currently at a daily high, with key resistance at USD 1.305.
The Bank of England has cut borrowing costs for the second time this year, reducing the benchmark interest rate to 4.75%. While eight members of the Monetary Policy Committee supported the move, Catherine Mann dissented, advocating for a hold at 5%. The bank cautioned that the budget could increase inflation by up to half a percentage point.
Catherine Mann
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