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22 Apr 2015
Cautious tone by BoE on inflation might weigh on GBP – RBS
FXStreet (Barcelona) - FX Trading Strategists at RBS, comment on the BoE’s stance on inflation and the possible impact on GBP from today’s minutes.
Key Quotes
“The Bank of England has maintained that it will look through transitory weakness in headline inflation due to lower energy prices, but the drop in core CPI to 1.0% y/y and the softer than anticipated pickup in average hourly earnings supports our view that inflation pressure will underwhelm relative to the BoE MPC’s expectations.”
“With relative yields seen acting as a primary driver of GBP, more cautious tone on the inflation path could weigh on GBP on a relative yield basis.”
“Our economists highlight in their preview that with the next Quarterly Inflation Report due in May, the policy debate in April may not have broken significant new ground.”
Key Quotes
“The Bank of England has maintained that it will look through transitory weakness in headline inflation due to lower energy prices, but the drop in core CPI to 1.0% y/y and the softer than anticipated pickup in average hourly earnings supports our view that inflation pressure will underwhelm relative to the BoE MPC’s expectations.”
“With relative yields seen acting as a primary driver of GBP, more cautious tone on the inflation path could weigh on GBP on a relative yield basis.”
“Our economists highlight in their preview that with the next Quarterly Inflation Report due in May, the policy debate in April may not have broken significant new ground.”