BoE: “Ignore the 16H1 Data Noise, We’ll be Back in July” – TDS

By FXStreet James Rossiter, Senior Global Strategist at TD Securities, notes that as expected, the MPC voted unanimously to keep BoE policy on hold while the minutes stressed that the MPC would look through any referendum-related data volatility over the first half of 2016.

Key Quotes

“There was little surprise in today’s MPC statement & minutes, with the committee generally viewing things as moving along as expected in their February forecast. The MPC acknowledged an economy growing near trend, but noted that wage pressures remain somewhat subdued (we disagree).

Perhaps the most important part of the release was the acknowledgement that data would remain choppy over the first half of the year as the referendum has effects on the exchange rate and broader uncertainty (especially for business spending). The MPC stressed that they would look through noise, meaning this will be a committee that is less data-dependent than normal. This sounds like an MPC trying to temper expectations of a cut.

While the MPC did hypothesise about possible implications of a UK vote to leave the EU, it generally lined up with our own macro view of that scenario, and was light on the details. The Bank of England will likely continue to shy away from …read more

Source:: FX Street