Do growth figures warrant a more bullish Bank of England?
Lacklustre GDP figures for the UK could raise some eyebrows this morning after a notably bullish Bank of England last week talked up the notion of rate hikes as early as May.
Quarterly growth of 0.4% is still modest despite many parts of the economy falling into place in recent weeks; Inflation and Wages have taken a bullish turn, supporting the notion that both McCafferty and Saunders propose – a rate hike immediately. Sanguine UK markets will, however, be short lived if growth fails to uplift towards the 1% mark in the short-term. As the one-year mark to a Brexit conclusion is upon us, clear pressure on the domestic economy will weigh on the ability to raise rates at the sort of pace the US is currently encountering, and thus possibly curtailing the upside for Sterling.
Alex Lydall quoted in Pound Sterling Live