It is too early to declare victory on inflationWill be monitoring data flow in the coming months to calibrate policy as neededUK economy has made good progress on disinflationBut persistent components of inflation and labour market uncertainty are causes for concernOutlook for wages, services prices is unclearBOE is hampered by challenges on quality of labour market dataNovember PMI may suggest some slowing in the economyBut don’t want to take a strong signal from just one single releaseViews the probabilities of downside and upside risks to inflation as broadly balanced
A little bit of this and a little bit of that. But her overall stance appears to fall in line with most of the policy committee at least. That in the sense that they favour a more “gradual” approach to cutting rates. As things stand, traders are pricing in ~79% odds that the BOE will leave the bank rate unchanged at 4.75% in December.
This article was written by Justin Low at www.forexlive.com.
