A brief comment ahead of tomorrow’s MPC..
Preoccupation with the French elections and political jostling on the domestic scene have caused UK monetary policy to slip from the forefront of market consciousness.
This could abruptly change tomorrow lunch-time; in our view, chances of a shift in voting pattern currently look under-priced. Broader expectations are for a repeat of last month, with Kristin Forbes set to provide a solitary dissenting ‘hike’ vote, yet recent statements have hinted at a shifting stance across the committee and data since will not have discouraged a sideways shuffle towards the five votes needed to change policy. This will not happen tomorrow but we believe there is a good chance of one or two of her MPC colleagues joining Kristin Forbes in voting for a rate hike. Any such headlines would see a sharp sterling rally.
FX round-up: Sterling edges up on dollar, euro ahead of BoE ‘Super Thursday’
Richard de Meo quoted in DigitalLook